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The forest sector in Sweden struggling and no longer seen as safe investment

Thursday, 24 January 2013
Last year the prices for forestland in Sweden fell for the first time in over ten years, according to figures from consulting firm LRF consultant, which is tied to the forest sector and owned by farmers association.

The consulting company writes in a release today that prices of forest properties declined during 2012, particularly in the second half. This is based on a latest data from LRF Konsult, Sweden's largest broker of forest properties. This means that the 15-year period of sustained price rise has been broken but the forest sector is now opened to opportunities for good long-term property acquisition.

The economic turmoil and the general recession in Sweden and Europe affected the prices in 2012. Especially, the falling timber prices, which has also driven down the value for forest properties, saw the fell of the property in the autumn. The areas most affected are especially in the northern parts of the country where the prices fall today is more. Also in areas of southern Sweden of Skåne and Småland there has been falls but in other parts of southern Sweden, prices are still impressive, remain the same or are rising.

In times of market turbulence and economic uncertainty, the Swedish forest sector has often been a safe choice for all who want to invest money in the long run. In about 15 years in a row prices have been steady up, but now, the trend is broken.

The average price of forestland fell in 2012 by about 2 percent, compared with last year. But the gloomy trend does not apply to all forest properties. Customers pay is still good for well-managed forests, such as large timber stock with good hunting opportunities.

After last year's setback, the question most people are asking now is whether the forest is still good to invest in. Knowledge in the sector now is very important in making a good investment. In the past ten years, people bought a forest property and got a safe asset growth without basically knowing anything about forest or forestry. That has to change today in order to gain better quality investment, according to experts.
By Scancomark.com Team

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