5 ms·

Also to add to that, an extreme number of new people immigrating to Sweden, especially under 2014-2016 [1] (which is my personal belief that is the leading caus

Also to add to that, an extreme number of new people immigrating to Sweden, especially under 2014-2016 [1] (which is my personal belief that is the leading cause to the biggest increases in prices). Many municipalities also letting up to 25% of these new people jump ahead the queues leaving Swedes to be even more forced to buy an apartment instead of renting [2]. Also in Sweden for apartments, you don't own it. Most apartments for sale is so called "Bostadsrätter" which means you own a percentage of the association that owns the apartment building(s). If the association/organization has a bad economy and can't pay the debt they could be forced to sell the entire apartment building(s) and you'd loose your apartment while still having a loan to the bank. Of course you would get that % of the profit, but since it selling in a time of crisis, that would mean you would most likely get significantly less than you otherwise would do. It doesn't even matter if you have a good economy, the association must have it as well. Lots of those associations or organizations have a really shitty economy and are sensitive to market changes. Especially in Gothenburg and Stockholm. [1] https://www.migrationsverket.se/images/18.5bc6881815e14db67502366/1510566869185/Total_s%C3%B6k.png https://www.migrationsverket.se/images/18.5bc6881815e14db675... [2] http://sverigesradio.se/sida/artikel.aspx?programid=98&artikel=6457520 http://sverigesradio.se/sida/artikel.aspx?programid=98&artik... EDIT: If you downvote / disagree, please explain why? What I stated is pure fact a with a touch of stated opinion which is backed by the numbers. EDIT 2: I've added sources for the stuff regarding to immigration.

estomagordo 9y ago
I don't even have enough karma to downvote you, but I'll make sure to come back to this thread when I'm above 500 :)
- staticelf 9y ago
  By that time your apartment at/in Södermalm will probably be worth half of what you bought for ;)
wjnc 9y ago
I upvoted. I guess it's the first few words that suggest a racist / popularist post, but it's ontopic IMHO. You point to an influx of people in the age range that usually rents an apartment. Such local equilibria are quite instable. It only takes a few hundred excess renters to destabilize a local (regulated) market for housing. That leads to crowding out where those that usually would rent, but can afford to buy will buy. A few more buyers will lead to the a dysequilibrium in the next market. One thing - you expect upward pressure on prices, with more people competing for the same number of houses. The OP is about falling prices.
- staticelf 9y ago
  Well, if you are increasing the population a lot, all of those people are going to need somewhere to live. It isn't really hard to figure that out but most people don't seem to make that connection. Don't understand how it could even be remotely racist or popular. The statistics of housing prices correlates very well with increases in immigration. Of course, correlation does not imply causation but in this case I'm personally pretty convinced it is the main causation of the extreme increases. Regarding the falling prices, yes, I believe they were about to fall even before the massive influx of new people (because of all the other things mentioned) but were artificially held up a couple of extra years due to new people.
  - tmikaeld 9y ago
    I'm kind of expecting to see a chain reaction happening next.. - Housing falls - Investors sell - Stock drops - SEK value drops (We are here) - Import prices goes up - Goods prices goes up - Less people are wiling to buy goods due to risk - Wages go down - People are let go - Fewer people are willing to buy goods - and so on..
    - jordanb 9y ago
      Your chain breaks at "less people willing to buy goods due to risk". SEK going down will push the costs of imports up. It will also make Swedish exports more competitive. Imports being more costly will cause Swedish consumers to substitute imported goods with local alternatives. The net will be that wages will go up and unemployment will go down. This is good. But the price of goods will become dear to the Swedish consumer and this is bad. And there's a possibility of a wage/price spiral driving up inflation.
lg 9y ago
> Also in Sweden for apartments, you don't own it. Most apartments for sale is so called "Bostadsrätter" which means you own a percentage of the association that owns the apartment building(s). If the association/organization has a bad economy and can't pay the debt they could be forced to sell the entire apartment building(s) and you'd loose your apartment while still having a loan to the bank. In the US we call these co-ops and they are mostly an NYC phenomenon. Fun fact, some co-ops don't own the land they sit on, they rent it. And those rents get renegotiated every 30 years, potentially making a bunch of co-op owners suddenly unable to afford their monthly maintenance payments.
- cjg_ 9y ago
  Some associations in Sweden does not own the land either (renting from the city) and that rent was increased just some time ago.
- nikanj 9y ago
  The Swedish system sounds closer to a strata system https://en.wikipedia.org/wiki/Strata_title https://en.wikipedia.org/wiki/Strata_title
  - staticelf 9y ago
    It's a shitty system, thats why we also now have "Äganderätter" which basically means "owned rights" which means you cannot be forced to sell. Unfortunately, not many buildings have that.
  - nisse72 9y ago
    It's not actually. Unlike strata, in a Swedish "Brf" you don't actually hold title to any real estate. As the GP says, you own a share in a co-op that itself owns the real estate, and that gives you the right to use the apartment that corresponds to your share. Something similar to strata title has been discussed for many years in Sweden: ägarlägenheter. I don't know whether anything has ever come of it, however.
cc81 9y ago
It has not been that much of a price change and while it will of course affect some it has not been the driver. It is not THAT difficult to get an apartment in the shitty areas where immigrants want to live but those who buy apartments won't buy in those areas anyway.
pimmen 9y ago
Increase in immigration absolutely increases the demand for housing, but it's often not enough to increase the housing prices alone. Look at what happened in the early 90s during the Yugoslav Wars, Sweden took in more refugees than ever before in history yet the housing prices went down and threw the country into economic recession because of all the investments into real estate. The financial regulations (or lack thereof) are far more responsible. They're present in all of Sweden's housing crises, this one included. It's the same when you look internationally.
- staticelf 9y ago
  I didn't imply that is was increasing the housing prices alone. If you read it again, I even start my sentence with "Also to add to that..".
eesmith 9y ago
"which is my personal belief that is the leading cause to the biggest increases in prices" The Sweden housing crises was decades in the making. https://www.thelocal.se/20170828/the-story-of-swedens-housing-crisis https://www.thelocal.se/20170828/the-story-of-swedens-housin... . Already the prices were high and housing scarce in 2010. https://www.thelocal.se/20100928/29292 https://www.thelocal.se/20100928/29292 , dateline 28 September 2010, quoting the local paper "Housing crisis worse than ever!" http://www.bbc.com/capital/story/20160517-this-is-one-city-where-youll-never-find-a-home http://www.bbc.com/capital/story/20160517-this-is-one-city-w... from 2016 points out "But amid strict building regulations and a lack of investment over a number of decades, successive governments have failed to build enough homes for its long-term residents, let alone the latest arrivals. ... Prices have also been pushed up since a law change in 2013, allowing private individuals to charge tenants based on their mortgage costs rather than comparable rent prices in the neighbourhood." That 2013 change is just before your 2014-2016 time frame. Perhaps it had a bigger effect on the market than you think? Yes, Sweden accepted a lot of refugees in the last few years. But as the first link points out, they cannot "afford the kind of houses that were being built in the years following the crunch." It seems more that they are priced out of the market more than causing the market prices to rise. (There are certainly secondary effects.) I tried to find something in the Swedish press. I think this is relevant: http://www.gp.se/nyheter/g%C3%B6teborg/s%C3%A5-l%C3%A4nge-m%C3%A5ste-du-k%C3%B6a-f%C3%B6r-l%C3%A4genhet-1.461693 http://www.gp.se/nyheter/g%C3%B6teborg/s%C3%A5-l%C3%A4nge-m%... from 2014, so before the timeframe you describe. If I read it correctly (thanks Google Translate), in Gothenburg there were 20,000 fewer homes, relative to the size of the population, than there was in the 1970s. There were 210,000 people registered in the housing queue, and the time an applicant needed to queue was 950 days. One of the people being interviewed also argues that "there is big gap between what is being built and what those who need a home can afford to pay. A survey conducted recently by Sifo on behalf of the Tenant Association shows that 70 percent of them are considered to be able to pay a maximum of SEK 5,000 for a one. A newly built one in Kvillestaden costs over 6 500 kronor." This seems to confirm the arguments presented in the English language press, that is, there are large-scale systemic factors that lead to the current housing crisis, and it cannot easily be explained by the large number of refugees.
mclightning 9y ago
Oh really? Where can I get that %25 get ahead in the queue thing? I am an immigrant moved in 2014, and I had to buy an apartment. Because of the freaking long queues. I have never heard of that %25 thing. Not the mention that residents register their kids at very early age to these rental queues, giving them a way ahead in these queues.

estomagordo 9y ago

I don't even have enough karma to downvote you, but I'll make sure to come back to this thread when I'm above 500 :)

staticelf 9y ago
By that time your apartment at/in Södermalm will probably be worth half of what you bought for ;)

wjnc 9y ago

I upvoted. I guess it's the first few words that suggest a racist / popularist post, but it's ontopic IMHO. You point to an influx of people in the age range that usually rents an apartment. Such local equilibria are quite instable. It only takes a few hundred excess renters to destabilize a local (regulated) market for housing. That leads to crowding out where those that usually would rent, but can afford to buy will buy. A few more buyers will lead to the a dysequilibrium in the next market. One thing - you expect upward pressure on prices, with more people competing for the same number of houses. The OP is about falling prices.

staticelf 9y ago
Well, if you are increasing the population a lot, all of those people are going to need somewhere to live. It isn't really hard to figure that out but most people don't seem to make that connection. Don't understand how it could even be remotely racist or popular. The statistics of housing prices correlates very well with increases in immigration. Of course, correlation does not imply causation but in this case I'm personally pretty convinced it is the main causation of the extreme increases. Regarding the falling prices, yes, I believe they were about to fall even before the massive influx of new people (because of all the other things mentioned) but were artificially held up a couple of extra years due to new people.
- tmikaeld 9y ago
  I'm kind of expecting to see a chain reaction happening next.. - Housing falls - Investors sell - Stock drops - SEK value drops (We are here) - Import prices goes up - Goods prices goes up - Less people are wiling to buy goods due to risk - Wages go down - People are let go - Fewer people are willing to buy goods - and so on..
  - jordanb 9y ago
    Your chain breaks at "less people willing to buy goods due to risk". SEK going down will push the costs of imports up. It will also make Swedish exports more competitive. Imports being more costly will cause Swedish consumers to substitute imported goods with local alternatives. The net will be that wages will go up and unemployment will go down. This is good. But the price of goods will become dear to the Swedish consumer and this is bad. And there's a possibility of a wage/price spiral driving up inflation.

lg 9y ago

> Also in Sweden for apartments, you don't own it. Most apartments for sale is so called "Bostadsrätter" which means you own a percentage of the association that owns the apartment building(s). If the association/organization has a bad economy and can't pay the debt they could be forced to sell the entire apartment building(s) and you'd loose your apartment while still having a loan to the bank. In the US we call these co-ops and they are mostly an NYC phenomenon. Fun fact, some co-ops don't own the land they sit on, they rent it. And those rents get renegotiated every 30 years, potentially making a bunch of co-op owners suddenly unable to afford their monthly maintenance payments.

cjg_ 9y ago
Some associations in Sweden does not own the land either (renting from the city) and that rent was increased just some time ago.
nikanj 9y ago
The Swedish system sounds closer to a strata system https://en.wikipedia.org/wiki/Strata_title https://en.wikipedia.org/wiki/Strata_title
- staticelf 9y ago
  It's a shitty system, thats why we also now have "Äganderätter" which basically means "owned rights" which means you cannot be forced to sell. Unfortunately, not many buildings have that.
- nisse72 9y ago
  It's not actually. Unlike strata, in a Swedish "Brf" you don't actually hold title to any real estate. As the GP says, you own a share in a co-op that itself owns the real estate, and that gives you the right to use the apartment that corresponds to your share. Something similar to strata title has been discussed for many years in Sweden: ägarlägenheter. I don't know whether anything has ever come of it, however.

cc81 9y ago

It has not been that much of a price change and while it will of course affect some it has not been the driver. It is not THAT difficult to get an apartment in the shitty areas where immigrants want to live but those who buy apartments won't buy in those areas anyway.

pimmen 9y ago

Increase in immigration absolutely increases the demand for housing, but it's often not enough to increase the housing prices alone. Look at what happened in the early 90s during the Yugoslav Wars, Sweden took in more refugees than ever before in history yet the housing prices went down and threw the country into economic recession because of all the investments into real estate. The financial regulations (or lack thereof) are far more responsible. They're present in all of Sweden's housing crises, this one included. It's the same when you look internationally.

staticelf 9y ago
I didn't imply that is was increasing the housing prices alone. If you read it again, I even start my sentence with "Also to add to that..".

eesmith 9y ago

"which is my personal belief that is the leading cause to the biggest increases in prices" The Sweden housing crises was decades in the making. https://www.thelocal.se/20170828/the-story-of-swedens-housing-crisis https://www.thelocal.se/20170828/the-story-of-swedens-housin... . Already the prices were high and housing scarce in 2010. https://www.thelocal.se/20100928/29292 https://www.thelocal.se/20100928/29292 , dateline 28 September 2010, quoting the local paper "Housing crisis worse than ever!" http://www.bbc.com/capital/story/20160517-this-is-one-city-where-youll-never-find-a-home http://www.bbc.com/capital/story/20160517-this-is-one-city-w... from 2016 points out "But amid strict building regulations and a lack of investment over a number of decades, successive governments have failed to build enough homes for its long-term residents, let alone the latest arrivals. ... Prices have also been pushed up since a law change in 2013, allowing private individuals to charge tenants based on their mortgage costs rather than comparable rent prices in the neighbourhood." That 2013 change is just before your 2014-2016 time frame. Perhaps it had a bigger effect on the market than you think? Yes, Sweden accepted a lot of refugees in the last few years. But as the first link points out, they cannot "afford the kind of houses that were being built in the years following the crunch." It seems more that they are priced out of the market more than causing the market prices to rise. (There are certainly secondary effects.) I tried to find something in the Swedish press. I think this is relevant: http://www.gp.se/nyheter/g%C3%B6teborg/s%C3%A5-l%C3%A4nge-m%C3%A5ste-du-k%C3%B6a-f%C3%B6r-l%C3%A4genhet-1.461693 http://www.gp.se/nyheter/g%C3%B6teborg/s%C3%A5-l%C3%A4nge-m%... from 2014, so before the timeframe you describe. If I read it correctly (thanks Google Translate), in Gothenburg there were 20,000 fewer homes, relative to the size of the population, than there was in the 1970s. There were 210,000 people registered in the housing queue, and the time an applicant needed to queue was 950 days. One of the people being interviewed also argues that "there is big gap between what is being built and what those who need a home can afford to pay. A survey conducted recently by Sifo on behalf of the Tenant Association shows that 70 percent of them are considered to be able to pay a maximum of SEK 5,000 for a one. A newly built one in Kvillestaden costs over 6 500 kronor." This seems to confirm the arguments presented in the English language press, that is, there are large-scale systemic factors that lead to the current housing crisis, and it cannot easily be explained by the large number of refugees.

mclightning 9y ago

Oh really? Where can I get that %25 get ahead in the queue thing? I am an immigrant moved in 2014, and I had to buy an apartment. Because of the freaking long queues. I have never heard of that %25 thing. Not the mention that residents register their kids at very early age to these rental queues, giving them a way ahead in these queues.