According to recent statistics from Statistics Sweden (SCB), housing construction halved in the first quarter of 2023 compared to a year ago. A decline that has not been so deep since the real estate crisis in the early 1990s. Due to the serious situation, Hallvarsson & Halvarsson recently gathered four construction and housing experts for a breakfast seminar and panel discussion to discuss solutions to the housing construction crisis.
According to recent statistics from Statistics Sweden (SCB), housing construction halved in the first quarter of 2023 compared to a year ago. A decline that has not been so deep since the real estate crisis in the early 1990s. Due to the serious situation, Hallvarsson & Halvarsson recently gathered four construction and housing experts for a breakfast seminar and panel discussion to discuss solutions to the housing construction crisis.
Tanja Rasmusson, Head of Economic Policy at the industry organization Byggföretagen, expressed her concerns about the situation. She stated that the current situation is worse than during the 1990s crisis. The number of new housing starts this year is expected to be just 25,000, compared to 70,000 in 2021.
Ulf Hansson, Head of Division at NCC, one of Sweden’s largest construction companies, confirmed the challenging state of housing construction. However, he also pointed out that despite society facing a downturn, NCC has successfully shifted its operations to larger construction projects in other areas, such as hospitals, care buildings, and prisons, where construction is still proceeding at a high rate.
Paneldeltagarna Tanja Rasmusson, Svante Jonsson, Mattias Carrass och Ulf Hansson, och moderatorn Jonas A Eriksson.
A Perfect Storm in the Housing Market
Svante Jonsson, CEO of the real estate advisory firm Tango Capital Markets, described a perfect storm that has nearly halted housing construction. Factors such as high construction costs, the removal of investment support, difficulties for property owners in charging reasonable rents for newly produced rental apartments, falling housing prices, and increased interest rates have combined to create a crisis that has significantly impacted housing production. This crisis primarily affects economically vulnerable groups, such as new arrivals and students.
Mattias Carrass, CEO of SSSB, Stiftelsen Stockholms Studentbostäder, one of the largest property owners in Stockholm, discussed the challenges that students face in establishing themselves in the housing market. He emphasized that SSSB is eager to build new housing but faces difficulties with financing in the current investment climate, as well as long and inflexible construction processes that cause construction projects to be delayed, resulting in significant problems.
Measures to Boost Housing Construction
The panelists reached a consensus that housing policy has been mismanaged by governments, regardless of party affiliation, for an extended period. They stressed the urgency of implementing a new housing policy. Otherwise, the risk is that many qualified construction workers will leave the industry, exacerbating the housing shortage.
Several concrete measures to address the housing crisis were proposed at the seminar:
- Establish a state crisis commission for housing construction.
- Improve housing financing (starter loans, revised amortization requirements, etc.)
- Review rent regulations and explore “affordable housing” solutions.
- Simplify regulations for new production and shorten lead times.
- Make the construction sector more attractive to workers.
To be continued. Hallvarsson & Halvarsson’s ambition is to monitor developments and assist its customers in navigating these challenging times. Please reach out to us regarding your company’s communication needs or if you have ideas and suggestions for further measures.
For more insights from some of the panelists, please read Dagens Industri’s coverage of the event. Dagens Industris bevakning från eventet.