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The Swedish housing market calls for improvisation - Buyers enticed with free rents

Monday, 22 October 2012
The Swedish housing shortage is acute in the Stockholm area but sales of real estate products are almost at a stand still. There are people seeking housing in the Swedish capital and around the major cities of the country but there are houses that cannot be rented out and also cannot be sold.

In this case, of unsold houses, something has to be done in such a way that these houses are sold. Therefore, several construction companies have started lowering their prices or are making offering of free rent to attract reluctant buyers.

Market analysts of the Swedish real estate market sector have identified that Swedish housing market has cooled off in recent years and there is the feeling that it has become more common for different types of discounts to be offered to attract cautious buyers.

During the past year, building giant Skanska has in two of its projects - one in Sundbyberg and one in Annedal in Bromma, offered free rent for twelve months. The rents here refers to the monthly charge or referings for the running cost people who buy apartments pay to the seller for the premises to be management properly.
Normally, real estate companies will not be giving discontent to seek their stocks sold but the market has almost stagnated and people's interest in purchasing houses has diminished.

The gloomy economic picture and growing unemployment means that the market for real estate in Sweden looks like it will keep on shrinking. Weak economy means that people will not earn money to invest in real estate. Those who are risk averse will also keep their money in other stock while watching that the house market would not collapse.

Not the least, Swedish house prices are practically very high as the houses here are very expensive - something described by many as being over valued. This high prices that is growing faster that incomes is also a factor that made the Swedish central bank to hold tight on interest rates.

It should also be noted that the very high cost of Swedish real estate means that household debts has been growing. Recently, Swedish household was classed as one of the highly indebted in the developed world with the high household debt mostly driven by house price rise.

As competition for the few active buyers is strong, the danger of attracting the few buyers is highlighted by the real estate dealers. Lowering the price or to reduce or make offer of free rent is not an easy game for many of the real estate companies. This is because those buyers who bought their houses earlier would not feel happy about others getting offers while they paid the full price.

Skanska usually tries to avoid price reductions and discounts as far as it goes but with a market like this, were products are not being shifted, something has to be done.
By Scancomark.com Team

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