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Swedish housing construction slumps to lowest rate in a decade

Emma Löfgren
Emma Löfgren - [email protected]
Swedish housing construction slumps to lowest rate in a decade
The Swedish construction industry is struggling to cope with high inflation and interest rates. Photo: Janerik Henriksson/TT

The number of new homes being built in Sweden has halved in the past year, new statistics show.

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Developers broke ground on roughly 14,550 homes in the first half of 2023, according to fresh data by number-crunchers Statistics Sweden.

That represents a 57 percent fall on last year and the lowest number of new builds since 2012, painting a worrying image for Sweden's housing supply.

Some 11,050 were apartments in multi-apartment blocks and around 71 percent were rental homes, the preliminary statistics show.

In the report, Statistics Sweden adjusted the 2023 data upwards by 15 percent to account for a delay in reporting.

The situation is even more dire if you look at some of the big metropolitan areas.

In the Greater Stockholm region, construction started on roughly 3,180 apartments and terraced or semi-detached homes in the first six months of 2023 (adjusted upwards by 15 percent by The Local based on Statistics Sweden’s data).

That's down from 8,046 in the same period last year – or in other words an estimated 60 percent drop.

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Greater Gothenburg’s declining construction rate was somewhat less bad than the national average, with a 44 percent drop in new builds. But Greater Malmö saw a 66 percent drop, with only an estimated 734 homes built in the first six months of the year.

Sweden is already experiencing a housing shortage, which is especially serious in the big cities. Business chiefs have raised concern that the construction crisis will not only have a direct impact on the economy, but also on Sweden’s and Stockholm’s ability to attract talent.

WHAT'S NEXT?

The building industry has like many other sectors in Sweden been hit by a rampaging rate of inflation and high interest rates in the past year, putting a strain on budgets.

In the long term, the government has said it wants to cut red tape and make more land available to boost construction. Builders are also calling on the government to use its upcoming autumn budget to tackle the crisis, by for example reintroducing investment aid for new builds.

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Comments (1)

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Matthew 2023/09/21 10:28
This is not a huge surprise and does match a trend we are seeing across Europe. If you look at the base cost for construction materials (up approximately 25% over two years), adding increased wages, lack of workforce, higher logistical costs and growing interest rates it is a perfect storm to disrupt an industry.

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