Oh no! We got the dreaded email: our homeowners are returning home.
Not totally unexpected, but I was hoping to get to spend another year in this lovely home we are renting now.
Instead, we embark on the dreaded journey of searching for accommodation.
The housing situation in Sweden’s larger cities is notoriously complicated and accommodation is to find difficult!
We live in Uppsala, Sweden’s fourth largest city, a university town with a high influx of students and academic staff and situated just a stone’s throw away from Stockholm, the country’s capital and one of the most over-valued housing markets in the world according to some recent research figures.
What Sweden does well, is build apartments rather than houses and attempt to keep cities compact with decent public transport. What it doesn’t do well is make it easy to find a place to live.
Why is it hard to find accommodation in Sweden, especially the big cities?
There are essentially two main factors contributing to the difficulty in finding accommodation in Sweden the lack of real market forces and the lack of flexibility in the market in the rental market. Add to this a purchasing market that is akin to gambling where the prices are pushed up in bidding wars.
In the cities most of the housing stock of apartments and terraced houses is tied up in private housing associations with very little council or social housing (from what I can tell). The advantage is that these tend to be relatively well managed. However, the rental market forces are somewhat suppressed by the housing structure and housing culture; The whole housing market certainly has a socialist vibe to it.
There are two types of housing associations
– ones in which the association owns the flats or houses and rents them out- we’ll call these Housing Associations,
– ones where individuals, who buy leasehold, own the flats and houses, but are governed by strict leasehold terms- these are bostadsförening, referred to as BRF.
City planning has meant that most individual houses are more on the outskirts and those within the city command astronomical prices… back to this later.
The rental market in Sweden
There are essential 5 routes to get an apartment to live in:
1) If you are a student, you may be able to get a student accommodation.
2) Through a housing association- The housing association rentals have queues, that parents sign their kids up to as soon as possible, and then the person may apply for properties becoming available and they get it based on their queue position. We joined the queue in Uppsala’s unified housing queue 2.5 years ago and on most days we find suitable apartment (our criteria is usually 3 bedrooms, 80 square meters plus), we are applicant number 50-80. So not much chance of 50 – 80 people dropping out.
Now, don’t think these are subsidised rentals either… No! They are full market price.
3) The second-hand rental market- Sometimes people who have acquired an apartment through the housing association queue system will rent out their apartment on a temporary basis. However, they have to have the official permission of the association (which would more often be denied than granted). We were warned to triple check everything if we went down this route of rental.
4) Leasehold properties are owned by individuals, but owners have to adhere to strict community policies enforced by the BRF. Renting these requires the approval from the BRF and they often impose strict time limits on owners renting out their apartments. Therefore, there are few private landlords with apartments to let.
We were lucky, when we moved here: our first rental apartment was such a set up. We loved the little apartment we had. However, the BRF top honchos didn’t like CampyVan in the driveway, therefore they changed the rules of parking with a majority vote, outvoting our landlord, and made our lives impossible … they won… we moved.
5) Find an apartment or house for rent in a private house with a private landlord.
This is the way we found our current rental. Sadly the owners are returning from a working abroad and will be moving back.
So we find ourselves on the hunt again. Our options are either being high enough on a list to get the place we have put ourselves forward for in the Housing Association lists, or we could get lucky and find a private landlord.
The alternative is stepping into the grey market: the secondhand renter market, renting from someone who has made it up the list high enough to get their apartment and then rents it to us. This feels too risky with 3 kids and a much higher likelihood of having to move within a year again.
Ok, so why not just buy an apartment?
The property sales market in Sweden
The Swedish housing market in property hotspots, like Uppsala, is well over-valued. This over-valuation occurs despite a seeming steady supply of new housing stock, new build apartment complexes springing up everywhere. The new builds are expensive. Either this stems from a high cost of the build- probably attributed to inefficiently in the process, high wages- or the builder and seller are making a shed load of money. Personally, I think it’s probably a combination of both.
To make the already high priced Swedish property sales market worse, the buying process is geared towards pushing prices up: All interested viewer attend one or two open house events, where potential buyers eye each other up.
The following day, after the viewing, bidding starts. Bidding is very easy. It can be done via text message. You get a text with every increase in bid and just reply back with your counter bid.
Can you imagine how out of hand the bidding can get and how it inches the prices higher and higher?
In the past weeks we’ve been in several bidding wars. The first one, as utter novices, Antoine was in an all day meeting, I was away and we didn’t see the text message come in from the estate agent asking for final bids. We lost a dream plot with a usable house at just below our maximum.
For the next ones we were on the ball… and just watched with amazement how the bidding spiralled out of control… we were out and wondering whether we just totally misjudged the market value. On one of the properties we were able to ask the agent what he felt about the price achieved: he was utterly astounded and said it went well above his expectation.
The peculiarity of Avgift.
Avgift is the monthly service charge for leasehold apartments and sometimes houses within in a BRF too.
The monthly service fee may include water, heating, TV, internet and sometimes even electricity. There are often communal washing facilities, which are bookable. We’ve heard fascinating stories of the passive aggressive behaviours these facilities bring out in members. The BRF may have a guest apartment that owners may rent for a couple of days if they have relatives coming over, some have gyms, pontoons on a near-by lake, or river, playgrounds and so on. Most apartments have an extra storage room somewhere in the building, perhaps the basement. (Fantastic for storing the out of season clothes.)
In some apartment complexes, especially older properties, the original builder may have passed on some of their borrowing to finance the build of the apartments to the leasehold company and servicing that debt adds to the monthly service fee cost. We’ve been warned to double-check the finances of the BRF if buy into one.
Other things that will also determine the monthly service charge is to what level the BRF intervenes in renovations. They are, of course, responsible for all external renovations and upkeep, as well as maintaining the communal areas, but some will take on the responsibility of internal renovations of all bathrooms (which are always set up as wetrooms in Sweden) in the complex and all electric meters. Thereby dictating the upgrade schedule for the owners.
As a buyer of a leasehold apartment, one needs to scrutinise, in Swedish, the details of the BRF finances, structure and schedules.
So finding a place to live in one of the major cities of Sweden is not easy to say put it mildly.
This is a path we are on:
putting our names down on endless lists
and constantly reevaluating our needs and priorities.