There are 2.4 million households in Sweden with mortgages, and 1.6 million of them have fixed mortgages which are due in 2023. In addition, approximately 150,000 households took out a mortgage in 2021, a year when the average mortgage interest rate was 1.4%, the lowest since 2005. When we enter the last period of 2023, the mortgage interest rate is expected to be somewhere around 5-6%, the highest average rate since the 2008 financial crisis, which means that nearly 1.7 million households in Sweden will face an entirely new financial reality by the end of 2023.
If you bought a property for 3,000,000 SEK in 2021 with an 85% loan-to-value ratio, you paid around 3,000 SEK in interest costs per month in 2021. In 2023, you will be paying between 11,000 to 13,000 SEK per month solely in interest costs for the same property. Additionally, most households are amortizing between 1-3%, and other expenses such as electricity, food, and heating have increased significantly in recent years. The issuance of new mortgages in Sweden, according to the Financial Supervisory Authority, has been the lowest since 2014 in 2023. While this is noteworthy, it is not surprising given the current interest rates and the financial strain on households.
As for unemployment in Sweden, according to the Swedish Employment Service's statistics, it has decreased slightly in 2023. However, the government still expects it to increase in 2023 and 2024. This means that, in addition to increased interest and household expenses, many households will also experience a negative change in their incomes during 2023 and 2024.
The housing market and households in Sweden are facing an autumn and winter where there will likely be a significant increase in activity both in buying and selling, as well as on the rental market. More people will be forced to sell, increasing the supply of housing, and as a result, housing prices will likely fall.
More people will also need to turn to the already extremely strained rental market, but at the same time, more households may consider the possibility of renting out rooms, accessory dwellings, and summer houses, which could increase the supply on the rental market. We might also see an increase in people exploring the option of moving to cheaper and less stressed housing markets in new cities and countries.
The need to securely and easily sort out your current or upcoming housing needs has probably never been higher in Sweden than it is now, whether it's finding a reliable and recommended real estate agent, landlord, or tenant. On heimo, a new and innovative service for the housing market, you will be able to find people, real estate agents, landlords, tenants, and companies that can be just the solution you need to solve your specific housing needs, all done through your housing profile, your personal network, and your personal recommendations.
Make sure to register today to be among the first to get access when we launch!