Market Trends of Sweden Luxury Residential Real Estate Industry
This section covers the major market trends shaping the Sweden Luxury Residential Real Estate Market according to our research experts:
Rise in Construction of New Dwellings Driving the Market
Sweden luxury homes market witnessing significant growth, after recovering from the pandemic crisis. millionaires and ultra-high net worth individuals are supporting the growth of the luxury homes sector. According to Sweden Statistics, in 2021, the construction of 63,900 dwellings was started in new buildings. This is 16% up from 2020, when construction of 54,869 dwellings was started.
Furthermore, in 2021, construction of 51,150 dwellings in multi-dwelling buildings were started, which is at a growth rate of 16% compared to 2020. Among these dwellings, 63% are rented, compared to 65% in 2020. Also, construction of 12,750 dwellings were started in one-or-two dwelling buildings. In addition, conversion of multi-dwelling buildings resulted in approximately 2,750 dwellings in 2021, compared with 2,711 dwellings in 2020.
However, Metropolitan areas in Sweden are witnessing robust growth in construction of new residential units. Construction of 29,363 units were started in 2021, with a growth rate of 9.4% when compared to 2020. Also, most of the new construction units are accounted by multi dwelling buildings, with more than 85% share.
Real Estate Prices for One-or-Two Dwelling Units Witnessing Growth
The increasing demand for luxury housing units in the country resulting rise in real estate prices of one-or-two dwelling buildings and holiday homes during 2021. Real estate prices for one-or-two dwelling buildings rose by almost 17% at national level in 2021 compared with 2020.
According to Sweden Statistics, real estate price index for one-or-two dwelling buildings, remained unchanged at the country level during the Q4 2021 compared with the Q3. Also, the average price for one- or two-dwelling buildings was almost SEK 3.8 million in the fourth Q4 of 2021. In the metropolitan areas, the average price spans from SEK 5.3 million in Greater Malmö to almost SEK 7 million in Greater Stockholm. In addition, the average price for holiday homes was around SEK 2.3 million in the Q4 2021. Whereas the average price for multi dwelling buildings was declined by 3% during Q4 2021 compared to the previous quarter.
Furthermore, in 2020, building prices saw significant growth. According to the Building Price Index (BPI), building prices increased by 5% for multi-dwelling buildings and by 11% for one- or two-dwelling buildings. In addition, the total average production price for one-or-two dwelling buildings in Sweden was SEK 36,166 per square meter of useful floor space in 2020. Meanwhile, in 2021, real estate price index of the country accounted for 984, up by 16.7% from 2020. Greater Stockholm has highest real estate price index with 1351 in the country.
