Housing in Stockholm

    I am pretty sure you would have found it difficult to find a place to stay in Stockholm. There are lots of people arriving in  Stockholm at a rate of 40 people per day that creates a strain on housing in general. As housing is the big portion of our spending monthly I thought its better I talk about this in my personal finance blog.

    In Sweden we have different type of accommodation like the villa's and apartment . The ones available for a new comers to rent would normally are apartments . In general apartments are built close to where there are some kind of public transport within a distance that could be covered by a short walk.

  There are two type of apartments that are available and are called Hyresrätt and Bostadsrätt which loosely translated to Right to Rent and Right to Reside, normally you would also hear the phrases 1st hand contract and 2nd hand contract.

Hyresrätt : Big Landlords like HSB , Wallenstam, AFA Fastigheter have created large apartment buildings or condominium associations that rent out apartments where you have right to rest and live until you wish just by paying the rent and their is no need for any capital like a downpayment or a loan. You don't own the apartment but you have the right to rent them and you are covered by tenent rights where you can't be evicted at will by the landlord. These type of contracts are usually refereed to as 1st hand contracts in local lingo.

Tip: Even though I was here for a very long time I missed getting into the Stockholm Hyresrätt queue.I got in just 5 years back .I would suggest to get into the queue and it costs 200 SEK per year to be in the queue and is worth it. The Stockholm Bostadsförmedlingen acts as agent, helping you find vacant rental apartments in the Stockholm region. To apply for an apartment, you must first register in the housing queue.  The apartments are allocated on the basis of time spent in the housing queue , so I would suggest to get in ASAP.

https://bostad.stockholm.se/

https://bostad.stockholm.se/Minasidor/login/Registrera/

There are separate queues for certain landlords,if there is interest to know I will update the blog with details on how to get into those queues aswell.

Bostadsrätt :  These are the apartments that you buy by paying the full cost of an apartment by taking loan from the bank, similar to India. The prices of apartments had been climbing steadily since the end of economic crisis in 2008-09 and  since then it was financially beneficial to buy an apartment to get capital appreciation. This became too attractive and the debt of households became too high to mange and hence amortization requirement was introduced  in the beginning of 2015 to curb people taking on too much debt and a more stricter one came in March of 2018 and since then the prices of apartment have come down to affordable levels.

Earlier  in 2015 the FI (Finansinspektionen) proposed the amortization requirement that required new mortgage takers to amortize two percent of the entire mortgage until the LoanToValue ratio is reduced to 70% of the home's value. Thereafter, they must amortize at one percent until the LTV ratio is lowered to 50%.

Later in 2018 the FI proposed a stricter amortisation requirement for households with large mortgages in relation to income. Accordingly new buyers with mortgages that are greater than 4.5 times their gross income must amortise at least 1 per cent of the debt in addition to the amortisation requirement that was in 2015. This came into force on 1 March 2018.

You can see how the prices have moved over the years in different part of Stockholm in the below link.

Svensk Mäklarstatistik

So if you want to buy a new apartment in a desired area , the first thing is to go for Lånelöfte or Pre approval of loan from any bank of your choice and participate in the bidding.

As I went though the process of buying an apartment recently, will detail it in the coming blogs.