Swedish housing market over heating – would affect the economy
Friday, 18 October 2013
There are already talks of the Swedish housing market overheating. Reports on Swedish television hold that the temperature of the housing market in Stockholm in particular has risen to boiling levels.
Real estate broker Ulf Friberg said to Swedish television that the temperature of the housing market in Sweden has increased, referring to the reports from the real estate organisation SBAB which carried out a survey of estate agents recently.
According to the report, this is caused by intense bidding, shorter selling periods and increased prices, likely driven by low interest rates, high occupancy and scarcity of houses.
Recently, small houses in town, that in Stockholm were sold for up to one hundred thousand Swedish Krona per square meter.
Brokers estimate that prices of condominiums will continue to rise up to three percent more before the end of the year. This means that the market is approaching overheating level. This is constricting potential house buyers and even professionals who are seeking to move to the cities to provide the cities with services that are required.
“For first time buyers, it has become increasingly more expensive, taking more out of their wallets. As such first-time buyers should be a little bit careful and think,” says Tor Borg, chief economist at SBAB Bank to Swedish television.
As much as young professionals are priced out of the market, this could lead to increased inflation in service provision as high rents will add to cost of services provided. Some authorities calculate that the prices for cleaning services to businesses (offices) and places like hotels could increase as worker for those places like in the nearest periphery of the city where rents have skyrocketed.
By Scancomark.com Team