Is Sweden's housing shortage on the way to getting solved?
So many flats and houses are now being built in Sweden that the country's housing shortage could be over within just six years, a new prognosis from state mortgage provider SBAB has found.
According to the lender, Sweden is estimated to now be building 50,000 new homes at present and in the coming years, comfortable above the 30,000 that are estimated to be necessary to keep up with population growth, meaning the housing shortage of about 90,000 homes should have disappeared by 2027.
"Home-building has continued apace during the pandemic and not dipped at all as we had feared in the spring of 2020, although it is expected to decline somewhat in the coming years. At the same time, Statistics Sweden has recently lowered its estimates of population growth significantly," the lender's chief economist, Robert Boije, said in a press release. "If these prognoses turn out to be right, we expect the housing shortage to be gone by 2027."
READ ALSO: Is the rising trend in Swedish property prices beginning to reverse?
With Sweden's economy now going at full pelt and inflation starting to pick up, Boije said that he also expected Sweden's central bank, the Riksbanken, to increase interest rates earlier than previously predicted, which could also weigh down on prices, which have stabilised since the summer.
Even if the housing shortage comes to an end, however, Boije said that this would not mean the end of structural shortages in the housing sector.
According to the HMI index put together by SBAB and the online property market Booli, house-builders are still failing to construct sufficient small suburban detached and terraced houses, particularly in the suburbs around Stockholm.
"It's high time we reassessed our priorities when it comes to home-building. It's long been apparent that we need to build more small houses," he said. "We need to make things easier for first-time buyers as well as for the elderly, who want to leave a big detached house with a bit plot of land, for a small house on a smaller plot."
He said that there was a need for new, modern garden suburbs or garden cities to be built.
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According to the lender, Sweden is estimated to now be building 50,000 new homes at present and in the coming years, comfortable above the 30,000 that are estimated to be necessary to keep up with population growth, meaning the housing shortage of about 90,000 homes should have disappeared by 2027.
"Home-building has continued apace during the pandemic and not dipped at all as we had feared in the spring of 2020, although it is expected to decline somewhat in the coming years. At the same time, Statistics Sweden has recently lowered its estimates of population growth significantly," the lender's chief economist, Robert Boije, said in a press release. "If these prognoses turn out to be right, we expect the housing shortage to be gone by 2027."
READ ALSO: Is the rising trend in Swedish property prices beginning to reverse?
With Sweden's economy now going at full pelt and inflation starting to pick up, Boije said that he also expected Sweden's central bank, the Riksbanken, to increase interest rates earlier than previously predicted, which could also weigh down on prices, which have stabilised since the summer.
Even if the housing shortage comes to an end, however, Boije said that this would not mean the end of structural shortages in the housing sector.
According to the HMI index put together by SBAB and the online property market Booli, house-builders are still failing to construct sufficient small suburban detached and terraced houses, particularly in the suburbs around Stockholm.
"It's high time we reassessed our priorities when it comes to home-building. It's long been apparent that we need to build more small houses," he said. "We need to make things easier for first-time buyers as well as for the elderly, who want to leave a big detached house with a bit plot of land, for a small house on a smaller plot."
He said that there was a need for new, modern garden suburbs or garden cities to be built.
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