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Sweden's housing market has transitioned from a sharp downturn to a period of stabilization and modest recovery as we reach mid-2025. Following significant price declines in 2023, the market has shown resilience with rising prices, increased sales activity, and improved buyer confidence driven by falling interest rates and cooling inflation.
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Sweden's residential property market is showing clear signs of recovery with house prices rising 2-3% annually and transaction volumes up 12-16% year-over-year in 2024.
Falling mortgage rates and cooling inflation are supporting demand, though new construction remains weak which could create future supply constraints.
Market Indicator | Current Status (June 2025) | Key Details |
---|---|---|
House Prices | Rising 2-3% annually | Stockholm +0.6%, Gothenburg +1.1%, rural areas +7% |
Transaction Volumes | Up 12-16% year-over-year | About 90,000 units sold in 2024 |
Mortgage Rates | 3.1-3.5% (falling) | Down from 2023 highs, further cuts expected |
Buyer Demand | Strengthening | 28% of properties selling above asking price |
Supply Situation | High listings, low new builds | Construction down 26-46%, inventory up 17% |
Investor Sentiment | Optimistic | Investment activity up 66% year-over-year |
Rental Yields | 4-7% nationally | Malmö and Uppsala highest at 6-7% |

What's happened to Sweden's housing prices over the past 12 to 18 months?
Sweden's housing prices have stabilized and are now showing modest growth after experiencing a significant downturn in 2023.
Following a sharp decline of approximately 6% nationally in 2023, Swedish house prices began recovering in 2024. Most price indices show annual growth of 2-3% by the end of 2024, marking a clear turnaround from the previous year's losses.
Major Swedish cities experienced varied but generally positive price movements. Stockholm saw modest gains of 0.6%, while Gothenburg performed slightly better with 1.1% growth. Malmö outpaced both with 2% annual price increases. The most impressive performance came from rural regions, which recorded up to 7% annual growth as buyers sought more affordable options outside urban centers.
When adjusted for inflation, real price growth remains flat or slightly negative, but the nominal upward trend indicates market stabilization. This recovery reflects improved buyer confidence and more favorable financing conditions as interest rates began declining.
It's something we develop in our Sweden property pack.
How many homes are actually being sold now compared to a year ago?
Transaction volumes in Sweden's housing market have rebounded strongly, showing a significant increase compared to the previous year.
After reaching historic lows in 2023 with sales declining by 17-19% year-over-year, 2024 witnessed a remarkable recovery. The market saw a 12-16% increase in homes sold, with approximately 90,000 units changing hands nationwide throughout 2024.
The recovery began early in 2024, with the first quarter alone showing an 8% year-over-year rise in transactions. By year-end, sales activity reached its highest level since the pandemic boom, indicating strong momentum in the market.
This surge in transaction volumes reflects renewed buyer confidence as mortgage rates began falling and price expectations stabilized. The increase also suggests that both buyers and sellers became more willing to engage in transactions after the uncertainty of 2023.
Are buyers showing more interest lately, or is demand still weak?
Buyer demand in Sweden's housing market is definitely improving, with clear signs of increased interest and competitive behavior.
The most telling indicator of strengthened demand is that 28% of properties sold in 2024 went for above their asking price, demonstrating competitive bidding and renewed buyer urgency. This represents a significant shift from the buyer's market conditions that prevailed in 2023.
However, homes are still taking slightly longer to sell compared to the 2021 peak period. The current average time on market is 28 days, compared to 25 days during the height of the pandemic boom. This suggests demand is strong but not at the fever pitch of previous years.
Buyer sentiment has been bolstered by falling interest rates and stabilizing price expectations. More buyers are entering the market and acting with greater decisiveness, though they remain more cautious than during the speculative peaks of recent years.
What's going on with mortgage rates in Sweden right now?
Mortgage rates in Sweden are falling significantly, providing much-needed relief to potential buyers, though they remain above pre-2022 levels.
The Swedish central bank (Riksbank) began an aggressive rate-cutting cycle in early 2024, implementing six consecutive cuts that brought the policy rate down to 2.25% by mid-2025. This represents a substantial easing from the high rates that characterized 2023.
The average variable mortgage rate for new loans dropped to 3.45% by December 2024, representing a decline of 1.4 percentage points from the previous year. As of June 2025, mortgage rates are generally in the 3.1-3.5% range, with further decreases expected.
Most forecasts anticipate rates will stabilize between 2.85% and 3.2% by the end of 2025, assuming continued economic stability and inflation control. These lower rates are significantly improving affordability calculations for potential buyers and contributing to the market's recovery.
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Is inflation helping or hurting the housing market right now?
Cooling inflation is definitely helping Sweden's housing market by improving affordability and boosting consumer confidence.
Inflation in Sweden dropped to 2.8% in 2024 and is projected to fall further toward the central bank's 2% target. This decline is particularly beneficial for the housing market as it allows real wages to rise, improving households' purchasing power for property investments.
The combination of lower inflation and falling interest rates has created a more favorable environment for property buyers. Real wages are increasing, which means Swedish households have more actual spending power despite previous concerns about high living costs and debt levels.
Broader economic signals are also positive, with GDP growing 0.7% in 2024 and projected to expand 2.6% in 2025. This economic recovery, combined with controlled inflation, is supporting both buyer confidence and lender willingness to extend credit for property purchases.
The improved economic backdrop has helped shift market sentiment from the pessimism of 2023 to cautious optimism as we move through 2025.
How tight or loose is housing supply in Sweden right now?
Housing supply in Sweden presents a mixed picture, with increased listings but severely reduced new construction creating potential future bottlenecks.
Current inventory levels have increased significantly, with listings reaching record highs in late 2024, up 17% year-over-year. This increase is primarily due to homes staying on the market longer rather than a surge in new properties becoming available.
However, the supply situation for new construction is concerning. New housing completions and construction starts have dropped dramatically by 26-46% year-over-year, raising serious questions about future supply availability. This decline in new building activity could create supply shortages in the coming years.
The housing shortage remains particularly acute in urban areas, where demand consistently outpaces supply. While current listings provide some relief for buyers, the lack of new construction suggests this relief may be temporary.
It's something we develop in our Sweden property pack.
Which types of homes are moving faster in the market?
Apartments and suburban or rural homes are leading market activity, while new construction lags due to supply constraints.
Apartment prices have shown particularly strong performance, rising 3-4% year-over-year and attracting significant buyer interest. This segment benefits from relatively better affordability compared to larger homes and strong demand from urban professionals and investors.
Suburban home prices are outpacing urban properties, with suburban areas showing 4.5% growth compared to 2.5% in urban centers. This trend reflects buyers' continued preference for more space and better value outside city centers, a pattern that emerged during the pandemic and has persisted.
Rural homes have shown the strongest price growth at 7% year-over-year, driven by lifestyle shifts and buyers seeking affordability. These areas offer significantly better value propositions compared to major urban centers.
New construction sales remain subdued due to the sharp decline in building starts and completed projects. This segment faces challenges from both supply constraints and higher costs, making existing properties more attractive to buyers.
Where is buyer activity most concentrated geographically?
Buyer activity remains centered on Sweden's major cities, but suburban and rural areas are gaining significant market share.
Stockholm, Gothenburg, and Malmö continue to dominate in terms of total transaction value and volume, representing the bulk of Sweden's high-value property market. These cities maintain their appeal due to employment opportunities, infrastructure, and lifestyle amenities.
However, there's a notable shift toward suburban and rural markets as buyers seek more space and affordability. These areas are attracting buyers who can work remotely or are willing to commute for better value and quality of life.
Central Stockholm shows relatively flat or slightly declining prices as supply catches up with demand in some segments. This suggests the most expensive urban areas may be reaching price ceilings that are testing buyer limits.
The geographic distribution of activity reflects a broader trend toward lifestyle-driven decisions, with buyers increasingly prioritizing space, value, and quality of life over proximity to traditional business districts.

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Are sellers cutting prices to close deals, or do they have the upper hand?
The Swedish housing market has become more balanced, but sellers are regaining leverage compared to the buyer-dominated conditions of 2023.
During 2023, buyers had significant negotiating power and frequently demanded substantial discounts from asking prices. However, 2024 saw a shift with more properties selling above asking price, indicating renewed seller confidence and buyer competition.
The gap between buyer and seller price expectations has narrowed considerably. Sellers are less likely to accept steep price cuts, especially in high-demand segments and desirable locations. This represents a significant change from the previous year when sellers often had to reduce prices substantially to attract buyers.
Negotiation opportunities still exist, particularly in less competitive areas or for properties that have been on the market longer. However, buyers can no longer expect the significant discounts that were common during the market downturn.
The shift toward more balanced conditions suggests that neither buyers nor sellers have overwhelming advantages, creating a more typical market dynamic where negotiation outcomes depend on specific property characteristics and local demand conditions.
What's the mood among real estate investors in Sweden?
Real estate investor sentiment in Sweden has turned notably optimistic, with activity levels and capital deployment rising significantly.
Investment activity rebounded strongly in 2024, increasing by 66% year-over-year, led primarily by domestic investors who are showing renewed confidence in the market's prospects. This dramatic increase indicates investors believe the worst of the downturn is behind them.
The yield gap between property returns and financing costs is narrowing, making investments more attractive from a financial perspective. Improved financing conditions, combined with stabilizing property values, have encouraged more aggressive capital deployment.
Investors are shifting their focus from defensive strategies and risk management toward growth-oriented approaches. There's increased interest in both rental properties and residential development opportunities, as investors anticipate continued market recovery.
The investment community is particularly focused on rental and residential segments, viewing them as offering attractive risk-adjusted returns in the current environment. This optimism is supported by falling interest rates and improving economic conditions.
It's something we develop in our Sweden property pack.
Are rental yields improving in major cities?
Rental yields in Sweden remain stable or are slightly declining, but they continue to offer attractive returns compared to other European markets.
The national average gross rental yield stands at 5.56%, which remains competitive for European standards. However, yields vary significantly by location, with some cities offering substantially better returns than others.
Malmö and Uppsala provide the highest rental yields at 6-7%, making them particularly attractive for yield-focused investors. These cities offer good rental demand combined with more affordable property prices compared to Stockholm.
Stockholm yields are lower at 4-5%, reflecting the city's higher property prices and premium market status. While the yields are lower, Stockholm properties often offer better capital appreciation potential and more liquid markets.
The rental market is experiencing increased supply and longer listing times, but demand remains strong due to Sweden's ongoing housing shortage. This dynamic is keeping yields stable despite some increase in rental property availability.
What should we watch for in the next 3 to 6 months?
The next 3-6 months will likely show continued market stabilization with potential for modest price gains, though several key factors warrant monitoring.
Most forecasts expect Swedish property prices to rise 2-5% in 2025, supported by continued strong sales activity and improving buyer confidence as interest rates continue falling and the broader economy recovers. This represents a continuation of the positive trends established in 2024.
The critical factor to watch is the balance between supply and demand. While current inventory levels are adequate, the sharp decline in new construction could create supply shortages in the medium term, potentially driving prices higher than current forecasts suggest.
Key risks include potential global economic shocks, renewed inflation pressures, or unexpected changes in monetary policy that could reverse the current favorable interest rate environment. Any of these factors could disrupt the recovery trajectory.
Monitor construction activity levels and government policy responses to housing shortages, as these will significantly impact medium-term market dynamics. Additionally, watch for any changes in buyer behavior as economic conditions evolve through 2025.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Sweden's housing market has successfully navigated through its 2023 downturn and is now showing clear signs of recovery and stabilization.
The combination of falling interest rates, cooling inflation, and improved economic conditions creates a supportive environment for continued market growth, though new construction shortages may create supply challenges ahead.
Sources
- Global Property Guide - Sweden Price History
- YCharts - Sweden House Price Index
- CEIC Data - Sweden House Prices Growth
- InvestRopa - Sweden Real Estate Market
- Hemnet Group - Year in Review 2024
- JLL - Sweden Market Turnaround
- CBRE - Sweden Market Outlook 2025
- Trading Economics - Sweden Interest Rate
- Statistics Sweden - Financial Market Statistics
- CBRE - Sweden Real Estate Market Outlook
- Global Property Guide - Sweden Rental Yields
- Swedbank - Economic Outlook