Swedish real estate sector is crying for help as the crisis in the areas just continue to strengthen
Wednesday, 24 July 2013
The Swedish real estate sectors which supposed to be the cash cow now has seen the design and construction of single-family houses falling to a very low level. This means that it is hard to get a normal simple accommodation for young professionals. The sector is how crying out for help.
Construction has fallen sharply in recent years and its is not known precisely why. Now the real estate sector in Sweden is seeking help to build stock in order to meet demand.
"New construction of single-family homes has dropped by almost 70 percent since 2006. There is an urgent need by many single-family companies," said David Johnson, CEO of TMF (Wood and Furniture Companies' trade association) reports Swedish news agency TT.
According to David Johnson, the reasons for the decline are many, but there have been a number of decisions that have made it more expensive to build new homes.
He mentions the technical rules on safety in windows, measures to reduce energy consumption in buildings and changes in the Planning and Building Act. In addition, the cost of building permits has also increased.
Overall, the average costs of each house with has gone up by Skr350 000, according to David Johnson to the news agency, although mortgage cap has made it difficult for single-family homes to be built.
"It is mostly first-time buyers who have difficulty entering the housing market. We would prefer a repayment requirement from banks instead."
TMF calls for a review of the rules put in place to avoid the housing market collapse.
Latest statistics from Statistics Sweden show that the number of new single-family homes in the first quarter of 2013 decreased by 27 percent compared with the same period last year.