New Report Reveals Challenges for Young People and Newcomers in Swedish Housing Market

A new report highlights the increased difficulty for young people and newcomers trying to break into the Swedish housing market. While saving for a deposit may take the same amount of time, other factors have raised the threshold for entry. Learn more about the challenges in the Swedish property market.

The struggle to enter Sweden's property market has become increasingly difficult for young adults and newcomers, according to a new report by Handelsbanken. While it still takes around 3-5 years to save up enough money for a deposit on a small apartment in one of Sweden's major cities, other factors have raised the threshold for prospective buyers.

The price of smaller apartments has remained relatively stagnant, with one room apartments going for roughly the same price now as they did in 2016. However, average salaries and prices for small apartments have both increased at the same rate, making it more challenging for newcomers to afford a property in the capital.

Legislation governing the rules under which mortgages can be awarded has also made it more difficult for prospective buyers. Changes to mortgage rules, including the introduction of amortisation requirements, have raised the bar for those looking to enter the housing market. Prospective buyers now need to earn more than Sweden's median income in order to afford a small apartment in Stockholm.

The report also highlights the challenges faced by newer immigrants to Sweden, such as struggling to find cheaper rental properties and having less savings due to other costs related to moving countries or paying international student fees.

For families who are less able to buy cheaper one or two room apartments, the time to save up a deposit is even higher, as prices for larger apartments have risen more than smaller apartments. The report indicates that the average salary for most people in the 25-29 age bracket is far below what is needed to afford a one room apartment in Stockholm.

In conclusion, the report sheds light on the increasing difficulty for young adults and newcomers to enter Sweden's property market, with rising prices and stricter mortgage rules creating significant barriers to homeownership.