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The dream of buying a house in Stockholm should be suppressed as it becomes almost impossible

Tuesday, 16 April 2013
People who aspire to buy a house in the Swedish capital, Stockholm should think again or just rob a bank. The price of property here has exploded such that it is now being popularly and openly said that buying a house in Stockholm is extremely hard.

Not only Stockholm, though, the country's second city, the heavy industrial hub of the Scandinavia, Gothenburg has seen its own prices also explode to a new record high.

House prices in both central Stockholm and central Gothenburg rose to new all-time high levels in March. Figures from the Swedish real estate organisation, Mäklarstatistik or Real Estate data show.

But the average price of a condominium in what counts as Greater Stockholm ended up at Skr37,952 per square meter during the past month, after a rise of 2 percent compared to February.

In central Gothenburg, there was a new record price of Skr40,465 per square meter. Someone who wants to buy a condominium in Malmö will spend about half what is spent in the country's second largest city, even though Malmö is well positioned -  closed to the European continent and Copenhagen, Denmark. Malmo central area command an average price of Skr20,457 per square meter, which has virtually remained unchanged from February.

Even from the perspective of twelve months, Malmö has gone its own way in terms of price movement within Swedish metropolitan big cities. Both central Malmö and the Malmö regions reported a slight decline in prices during the period, while there has been price lift by 10 to 14 percent in the Stockholm and Gothenburg region.

One argument for persistent price falls in Malmö has been that the city's less attractiveness comes due to persistent far right activities in the city and its region. The far right party, the Sweden Democrat control the area. The second point always associated with house price fall in the Malmö has to do with the Danes not buying Swedish houses any longer as before. As Danish houses prices started falling some two to three years again, Danes started returning to Denmark and Copenhagen where they could now afford a house at home. Also the Danish Krona has seen its value fallen compared to the Swedish Krona hence the bargain the Danes used to get from Swedish homes in the Malmö area has died.

"The price increase that we have seen on the condos may well continue because there is a shortage of housing in many locations. It underlines the need that more houses should be built across the country, especially in places with high occupancy," said Peeter Pütsep, CEO of Swedish Property.

He notes that the supply of both condominiums and villas are lower than at the same time last year. The lower the supply, combined with greater demand, particularly for condominiums contribute to the price increase.

The astronomical prices of Swedish houses is not more new news. Various organisations, both at home and abroad have called on the Swedish government to do something about the exorbitant prices placed on Swedish houses. It is generally said that Swedish house are over valued. Thus as the process of house prices movement continue, many people will not be able to buy a house in the country's biggest cities except Malmö.

Swedish Mäklarstatistik AB has since 2004 been giving comprehensive picture of the evolution house prices in Sweden - for  in villas, cottages and apartments. The statistics are based on approximately 70 percent of all sales made through estate agents. The large amount was made possible by collaboration between another real restate organisations such as Fastighetsbyrån, Swedish Property and Real Estate Agents and various industry organization.
by Team

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