Sweden is a nature loving country that offers a variety of landscapes from wooded alpine plains in the North, rocky coastlines in the West, white sandy beaches in the South, and a 24,000-island archipelago in the East. The ultra-trendy capital city of Stockholm lies in the mid east on the coastline of the archipelago. Sweden offers some of the highest standards of living found anywhere in Europe. Foreign residents represent about 6,3% of households in Sweden, most originating from other Scandinavian counties, Europe, the Middle-East and China. Stockholm is attracting a growing number of high-end foreign buyers thanks to its revisions on wealth and inheritance taxes.
The Swedish home market has been surging consistently for the past several years with prices increasing year on year in double-digit figures. The world financial crisis of 2008 had little effect on the Swedish economy and the home market. During the past 12 months home prices (national average) have increased by 15,3% (apartments 19,1% and houses 13,2%). The largest increase was seen in the city of Gothenburg with apartment prices soaring by 24% in the past year. The unusually low number of homes available for sale is one of the primary driving forces in the overheated real estate market in Sweden. The average price/m² in parts of Östermalm, Stockholm has now surpassed €10.000/m² and in the center of Gothenburg above €6.000/m². Mortgages span over unusually high periods, many being amortized for 140 years; this combined with “all time” low interest rates, is another dynamics that is fueling residential prices. As a measure to stabilize the soaring prices, lawmakers are initiating a change in the constitutional law to give the Swedish Financial Service Authority more jurisdiction over banks and lending institutions. First item on the agenda is to strengthen the rules on amortization. Fees will be implemented on properties with LTV’s above 50% in order to increase the level of homeowner amortization.
There are no restrictions for foreigners buying property in Sweden. For those seeking luxury lodging in Stockholm, the place to start is Östermalm, the high-end city center district. The district’s grandest street is Strandvägen, with views across Stockholm’s waterfront to Gamlastan, the old city and location of the Royal Palace. Stockholm offers a stunning array of ultra modern to 19th century architectural homes.
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