Despite many factors driving the Swedish real estate market down, statistics show that real estate in Sweden has good prospects for development. The fall in housing prices in this country is gradual, and the reasons for the decline are due to the inadequate commissioning of new buildings and the poor development of the mortgage market.
The boom in the Swedish real estate market, which lasted a decade, ended in 2008. This was the year of falling house prices, a significant decline in sales of real estate, as well as a complete “freeze” of construction activities in the country. However, the fall in property prices in Sweden was not abrupt.
The average cost of an ordinary house in Sweden (usually calculated for one or two families) decreased by only 2.9% (at the end of the first quarter of 2009) and reached € 166.018, according to the Statistical Office of Sweden (Statistics Sweden).
The Swedish real estate market remains weak. In all areas of Sweden, there has been a large drop in housing sales, from 22% to 35%, compared to the same quarter of 2008. The number of homes sold across Sweden fell to 8,811 units, in comparison, from 2004 to 2008 in the country quarterly sold about 15 000 properties.
Construction activities in the country also declined sharply. The construction of new facilities was reduced to 2,284 units, although, from 2004 to 2008, about 7700 new objects were commissioned on a quarterly basis.
In the late 80’s. In the last century, the famous “Swedish model” was under threat, therefore in Sweden, a number of reforms were adopted that reduced the role of the state in the economy, which ultimately led to faster economic growth. The country began to recover gradually after the economic crisis of the early 90’s. The country’s GDP began to grow, on average, by 1.4% per year.
Recent radical taxation reforms have significantly reduced the costs for property owners and tenants in Sweden.
In 2006, taxes for owners of real estate leased were reduced by half, as well as for rental associations and their members.
In 2007, the tax on the estimated rent of housing was abolished, making real estate more preferable for rental.