If you are planning to buy property in Stockholm, its best to understand as much as possible about the local real estate market, procedures around buying a house as an expat, and an expectation of the budget you'll need.
Sweden's property market is far from simple. For a while, the country has been struggling with affordability in the capital city. Prices rose to a point where businesses were leaving the city, and finally, in late 2018, prices started to fall. Although property prices are likely to rise again in the future, this development has given new homeowners a chance to enter the market.
Funds
Due to the historic housing shortage and the fact that the living cost in Stockholm is higher than average, it's incredibly difficult to find a bargain buy in the capital city. However, since the housing market has taken a dip it is now considered a buyer's market so you might be able to find a semi-affordable option in some areas (affordable according to the standard housing prices in Sweden, of course!)
Housing prices vary greatly depending on the neighbourhood and type of property. Inner-city apartments of 34m² can cost well over SEK 2,500,000 while luxurious properties such as penthouse apartments and multi-level places will cost significantly more. Housing prices in outlying areas are much more affordable.
Things to keep in mind
When purchasing a property, remember to keep in mind that there are processing fees that should be included in your budget calculations. Here are some of the fees to be taken into account:
Document fees (known as the 'avgift' ' this is usually 1.5% of the purchase price)
Building association costs (especially in 'andalsbolig', or co-operative houses ' this is a maintenance fee for large apartment buildings)
Utility costs (internet, cable TV, heating, etc.)
Many apartments also have an additional charge per month to the building association, and these can run quite high. Utilities such as the internet, cable TV, and heating should also be calculated.
Practicalities to consider
When purchasing a house in Sweden, expats need to go through the same steps as locals ' plus a few extra. Although you don't need citizenship or even a Swedish ID number, you must have a residence permit. EU citizens need to register with the Swedish tax agency, while non-EU/EEA citizens need a residence permit before entering Sweden.
Financing must be done through a Swedish bank. Proof of income and other supporting documents will be requested when you apply for a loan, so remember to have those ready. As non-Swedish house buyers, you might have a bad credit score, which leads to a worse interest rate on mortgages.
All property purchases in Sweden require a minimum down payment of 15% of the total purchase value. Although it might be possible to find a 100% mortgage from a bank, it's highly unlikely.
Consider renting
If you are feeling intimidated by the housing market in Sweden, perhaps it's better to rent accommodation first. Once you've lived in Stockholm for a few years and better understand the local real estate market, buying property will be much easier.
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