Swedish government says preparing incentives to boost housing construction, ET RealEstate

June 24, 2023

STOCKHOLM: The Swedish government is currently working on reforms to boost flagging housing construction, which has been hit by higher building costs and falling demand, Finance Minister Elisabeth Svantesson said on Wednesday.

Housing starts dropped by 50% in Sweden in the first quarter as higher interest rates, rising construction costs and lower demand hit building firms, data showed in May. The lower rate of construction is expected to hit growth with the economy seen contracting over the year as a whole.

“On the housing market, I share the view that we have problems,”, Svantesson told a news conference. “That’s why the government now is preparing reforms to increase incentives for housing construction.”

She said the government’s reforms aimed at making more land available for building and reducing complexity in getting building permits.

According to the Swedish National Board of Housing, Building and Planning, around 27,000 new homes are expected to be started this year and 24,000 in 2024, far fewer than the 63,000 deemed necessary each year until 2030 to cover the current and future need.

Unions and constructions associations are among those calling on the government to act to head off a damaging housing shortage which will have widespread social implications.

“The consequences of the collapse of housing construction, which is similar to the levels of the 1990s, will be seen first in a few years,” Stockholm County Governor Anna Kinberg Batra said in a report this week, which forecast housing starts in the capital would fall to around 4,000 this year, down 70% on 2022.

“The conditions for housing construction have rarely been bleaker.”

  • Published On Jun 15, 2023 at 05:00 PM IST

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