Housing Construction in Sweden Falls by 50% in Q1 2022, Lowest Level in 10 Years

Housing construction in Sweden fell by 50 per cent in the first quarter compared to the same period last year, according to figures from the statistics agency SCB.

Housing construction in the neighboring country is at its lowest level in ten years, according to the report the figures from SCB. In the first quarter, 8,300 housing starts were started compared to 16,675 the previous year.

– We have structural problems and need structural reforms, says Housing Minister Andreas Carlsson (KD) to the Swedish news agency TT.

The decline was particularly large in Stockholm and other larger cities. In Greater Stockholm, 1,344 homes were started, which is a drop of 68 per cent. The decrease in Uppsala was 78 per cent.

Carlsson says that rising interest rates, inflation and energy costs are among the factors that have contributed to the worsening situation in the housing market.

Can be halved

Anna Broman, housing policy expert in the industry organization Byggföretagen, describes the situation as serious.

– We are in the worst crisis since the 1990s. Housing construction will be more than halved in two years, she tells TT.

She points out that the hardest hit groups are young adults and others who want to enter the housing market.

In 2021, almost 70,000 homes were built. Byggföretagen estimates that the number will fall to 25,000 this year.

Problems in Norway too

Here at home too, these are challenging days for housing developers. New home sales fell 35 per cent in April, while starts fell 41 per cent.

So far this year, the market has almost halved compared to last year. At the same time, the activity is at the level during the shutdown during the pandemic.

– It is not surprising that there are still weak sales figures. It comes with all the uncertainty we face, not least when you buy a home that will be completed in two years. There is uncertainty related to price and interest rate developments, said senior economist Sara Midtgaard at Handelsbanken to E24 when the figures were presented.