Housing prices in the long term
The large price ranges for housing in recent years are primarily an urban phenomenon in both Denmark and Sweden. The sharply rising housing prices in both Denmark and Sweden mostly due to the strong growth and the low interest rates that have held for several years. The large increases in housing prices has been especially sharp, especially in the Capital Region of Denmark, and can be explained by the introduction of mortgage-free home loans in 2003, which further contributed to the increases in prices. An effect of this development is that the Capital Region of Denmark is developing into a more closed market for first time buyers and people with average incomes. This has led to more buyers opting to move to southern or western Zealand or to south-western Skåne. The price for tenant owned apartments in the Capital Region of Denmark during the second half of 2006 had fallen and prices for one- or two dwelling houses did likewise in 2007, which is an indication that the Copenhagen housing market is in the process of cooling off. At present however, it is impossible to say whether a more drastic dip in prices is to be expected or if what is happening now is simply a market adjustment to a somewhat lower price level. In Region Sealand the prices have continued to rise for both tenant owned apartments and one- or two-dwelling houses.
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Housing prices has increased the most in Malmö
A continued rise in the economy, low interest rates and repealing of the real estate tax mean continued sharp price increases for residental housing in Sweden as well as in the three greater metropolitan areas.
Average prices per square metre for detached dwellings as well as tenant owned apartments are significantly lower in the Malmö area than in Sweden’s two other greater metropolitan areas of Stockholm and Gothenburg. By the fourth quarter of 2006 a tenant owned apartment in the greater Stockholm area cost an average of EUR 3 180 per square metre, EUR 2 080 in the greater Gothenburg area and EUR 1 640 in the greater Malmö area. The average price for one- or two-dwelling houses in the greater Stockholm area was EUR 2 840 per square metre during the same period, but the price for one- or two-dwelling houses in the greater Gothenburg and Malmö areas was approximately EUR 2 300 per square meter. Meanwhile, the price development has been much sharper in the Malmö area than in the other two greater metropolitan areas, which proably because of intense immigration from Denmark in recent years.Between the fourth quarters of 2001 and 2006, the average price for tenant owned apartments has increased by 70 percent in the greater Stockholm area, by 115 percent in the greater Gothenburg area, and by 161 percent in the greater Malmö area. The signs that housing prices in Zealand have started to decrease could lead to housing prices on both sides of Öresund starting to even out somewhat. The price difference compared to the greater Malmö area is in any case extensive and it will probably require a substantial price decrease in the Copenhagen area to lessen the Danish immigration to Skåne.
- Tenant owned apartments: Average price per square meter in Swedish greater metropolitan areas 1st quarter 1996- 2nd quarter 2007
Source: Värderingsdata AB
