Savills: Demand for Swedish residential assets remains strong despite challenges ahead

This corresponds to approximately SEK 38 billion (c.€3.49 billion). Foreign investors accounted for 12% of the total Swedish residential investment volume; significantly below the 38% five-year average. 

Residential assets are on track to be the most desirable real estate sector for investors for the sixth consecutive year in terms of volume, yet the sector is heavily burdened by high financing costs.

Carolina Herling, Head of Investment, Savills Sweden, says: “Due to the residential sector being low yielding, the increasing interest rates we have seen since the turn of the year make it impossible for investors to purchase at the previous price levels. Buyers and sellers are often unable to match expectations which has been noted especially during the third quarter and has resulted in a significant decrease in the number of residential transactions.”

Maryrose David, Head of Research, Savills Sweden, comments: “Residential real estate has been the backbone of the Swedish economy since the second world war. With the decrease in supply of material leading to the postponement of development projects, demand for housing will remain and prices will correspond to this demand. However, yield softening is likely to occur, and property values will decrease in the near future across all sectors.”

“It is however important to remember that when it comes to growth and demand, the market fundamentals for the Swedish residential sector are still very much intact.” 

-ends-

To read the full report, please visit:

https://pdf.euro.savills.co.uk/sweden/savills-residential-market-overview---sweden-november-2022.pdf