The Swedish housing market has witnessed a steep increase in prices in recent years, and this is the consequence of the supply of new houses not meeting the present and increasing demand for accommodation. A major reason for the increase in demand for buying property is that renting property has become increasingly difficult due to scarcity, especially for younger adults entering the property market for the first time.
With record low interest rates currently being offered by banks, many Swedes have therefore taken on mortgages in order to purchase properties, which has consistently pushed prices higher and higher in recent years.
The Swedish government has through various means sought to control this steep rise in house prices including by introducing reforms that impose forced payments on borrowers, as well as seeking to increase the supply of new constructions in the Swedish housing market by loosening regulations to allow foreign players to enter the market, as well as by providing greater financial assistance to local players previously unwilling to engage in housing construction projects due to lack of profitability.