Stockholm has topped a list of Europe's fastest growing places, with the city's population expected to top one million in the next five years, rising from 911,989 to 1,012,488 by 2020, an increase of 11 percent.
The table was compiled for the Stockholm Chamber of Commerce by Swedish economist Peter Stein, who analysed the latest data on city expansion across Europe.
Neighbouring Nordic capital Copenhagen came second, with a predicted rise of 10.3 percent.
Meanwhile Oslo, which topped the same table last year came third, with an expected population increase of 7.9 percent.
“We are really happy and optimistic about this population growth because it creates more of a critical mass in Stockholm which will help us in the global market moving forward,” Maria Rankka, CEO of Stockholm Chamber of Commerce, told The Local.
“It's also worth noting that dating back to the mid-90s we have had a very steady GDP per capita growth (…) so it's not just the population that's growing, it's the wealth as well.”
However Rankka raised concerns that the city's infrastructure would need to be improved in order to accommodate the rising numbers of people moving to what is already the largest urban hub in Scandinavia.
“We should continue to improve the underground and roads and railways and we also need to deal with our totally dysfunctional housing market (…) or we will have a lot of problems,” she argued.
“There is a housing shortage to do with rent controls and low mobility (…) also the construction industry is still heavily regulated so we need to make it easier to get plans through.”
Stockholm's housing market is the source of heated debates within the business and political communities.
In theory, the market is tightly controlled, with rental companies banned from charging tenants above a certain level in a move designed to stop young people and low earners being driven away from urban centres.
In practice, rents vary wildly in Stockholm since there aren't enough apartments with rent caps to go round. It can take 20 years to get to the front of the queue with only around 40 percent of residents lucky enough to have such an elusive first-hand contract. Others look for second-hand leases or rent directly from private landlords.
Sweden’s Social Democrat-Green coalition has promised to set aside 5.5 billion kronor ($665m) for various housing projects in Sweden in its autumn budget due to be passed by parliament in what Finance Minister Magdalena Andersson has described as the “biggest housing political investment in 20 years in Sweden”.
Stockholm's business community is also pulling together to try and ease the crisis.
“The housing market is a bit tricky but there is help to be had,” said Julika Lamberth, Business Development Manager for Stockholm Business Region, a state-funded company working to make Stockholm the leading sustainable growth region in Europe.
She told The Local earlier this week that the organisation was constantly consulting with businesses and international professionals in the city to analyse the problem. This includes stepping up efforts to link tech firms with local municipalties and real estate companies in the area.
“We are a facilitator and we can connect interesting players together (…) to make it easier for international companies to continue to attract international talent.”
Europe's ten fastest growing cities
READ ALSO: How to navigate Sweden's crazy rental market