Authored by the expert who managed and guided the team behind the Sweden Property Pack
Yes, the analysis of Stockholm's property market is included in our pack
What will happen in Stockholm’s real estate market? Will prices rise or fall? Is Stockholm still a prime location for international investors? How are Sweden’s government policies and taxes shaping the real estate landscape in 2025?
We’re frequently asked these questions because we’re deeply engaged in this market. Through our collaborations with real estate agents, property developers, and clients purchasing homes in Stockholm, we’ve gathered firsthand insights.
That’s why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive perspective on market predictions and forecasts.
Our aim is straightforward: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Foreign investment in eco-friendly homes will increase in Stockholm
Stockholm is set to see a rise in foreign investment in eco-friendly residential developments for several reasons. First, the city has experienced a significant population increase, with a 20% rise over the past decade, which has driven demand for sustainable living options. This growth is fueled by both local and international migration, leading to a high demand for rental properties that are environmentally friendly.
Additionally, the Swedish government has been actively promoting sustainable development through initiatives like the green bond program. This program has invested a substantial portion of its funds into green building projects, showing strong governmental support for eco-friendly construction. Such incentives make Stockholm an attractive destination for investors looking to align with environmental values.
Moreover, Stockholm's reputation as a leader in sustainability is being highlighted internationally, attracting eco-conscious investors. The city is also recognized as a tech and innovation hub, which further draws investors interested in sustainable projects. These factors, combined with the increasing number of LEED-certified building projects in the city, indicate a growing trend towards sustainable development in Stockholm.
Sources: Barings, Statista, Region Stockholm Green Bond Impact Report 2023, DiVA Portal
2) Property prices in Norrmalm will fall as commercial spaces grow faster than residential areas
The northern district of Norrmalm is likely to see a decline in property prices as commercial spaces outpace residential development. This trend has been building over the past few years, with increased commercial real estate development permits being issued in the area. The Swedish Journal of Geography has highlighted significant investments in non-residential floor space and traffic areas, indicating a shift towards commercial activities.
Additionally, there has been a noticeable decline in residential construction projects in Norrmalm. Historical data shows that this pattern isn't new; similar trends were observed in the early 1960s when non-residential construction boomed while residential projects dwindled. This historical pattern suggests that commercial development often outpaces residential development in this district.
Moreover, local government zoning changes have favored commercial over residential development, further contributing to this shift. The Swedish Journal of Geography discusses how urban redevelopment policies in Stockholm have leaned towards non-residential projects, particularly in areas like Lower Norrmalm. This has led to an oversupply of commercial spaces, with experts predicting a market correction due to commercial oversaturation.
Reports from 2024 indicate a sharp decline in property demand, with nationwide home sales falling significantly. This decline in residential demand could be attributed to a shift towards commercial properties, which are experiencing increased investment and development. Rising vacancy rates in residential properties and decreasing rental yields further support the argument for a decline in property prices.
Sources: Global Property Guide, Swedish Journal of Geography, International Banker
We have made this infographic to give you a quick and clear snapshot of the property market in Sweden. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Sustainable housing projects will grow as new tax incentives for eco-friendly buildings are introduced
New tax incentives are set to significantly boost sustainable housing projects.
In recent years, especially in 2023 and 2024, we've seen a surge in government support for eco-friendly construction. Take Sweden, for instance, where the government is backing projects like the Stockholm Wood City. This initiative is a prime example of commitment to sustainable innovation and resource-efficient building methods.
Stockholm has become a hotspot for green building projects. In 2023, the city saw a 21% jump in completed apartments, totaling 65,600. This places Sweden 5th globally in sustainable housing, reflecting a growing trend towards eco-friendly living. More and more people are looking for homes that offer innovative, sustainable solutions.
Financial incentives for developers are also on the rise, making it easier to build green. Stockholm's regulations, like the push for local renewable energy, encourage developers to create energy-positive buildings. A recent competition between developers to build the most efficient energy-positive structure highlights this trend. These incentives, along with media attention on sustainable living, are driving public demand for eco-friendly projects.
Consumer surveys reveal a shift in preferences, with tenants increasingly seeking out sustainable homes. This change is supported by the city's efforts to promote eco-friendly architecture, which is becoming a key factor in housing decisions. The combination of financial incentives and public interest is fueling the growth of sustainable housing.
As more people become aware of the benefits of sustainable living, the demand for eco-friendly homes continues to rise. This trend is not just about environmental responsibility; it's also about creating a better quality of life. The focus on sustainability is reshaping the housing market, making it more attractive to potential buyers.
Sources: ICLEI, Stir World, Markets and Data
4) Property prices will rise as new parks and green spaces make nearby areas more attractive
New green spaces and parks can significantly enhance the appeal of nearby residential areas, leading to increased property prices.
Take Hammarby Sjöstad in Stockholm, for example. This area was once an industrial zone but has been transformed into a sustainable neighborhood with lush green spaces. The project focused on creating a living environment with reduced environmental impact, featuring innovative green designs and maximizing natural light and waterfront views. As a result, property values in the area increased, showing how green spaces can boost residential appeal.
Research from the Stockholm Resilience Centre found that properties near multifunctional green spaces, which offer aesthetics, social interaction, and nature, saw an increase in value by up to 10.4%. This highlights the economic benefits of urban green spaces and their positive impact on property prices. Post-pandemic trends also show a growing preference for homes with outdoor spaces, like terraces and gardens, often found near parks. This shift in buyer preferences further supports the idea that green spaces can drive up property values.
Urban planners and real estate analysts emphasize the importance of green spaces in enhancing residential appeal. They recognize that integrating green and nature-based solutions into urban planning can significantly impact property values. The City of Stockholm's commitment to preserving and expanding natural green areas as part of its urban growth strategy underscores the potential for green spaces to positively influence property prices.
Moreover, the increased foot traffic and business activity in areas like Hammarby Sjöstad, following the creation of new parks, contribute to a thriving local economy. This makes these areas more desirable for residents and businesses alike, further boosting property values. The local economy thrives as more people are drawn to these vibrant, green neighborhoods.
Sources: Stockholm Resilience Centre Study, Hammarby Sjöstad Case Study, Stockholm’s City Plan and Regional Plan
5) More Asian buyers will target Stockholm, increasing competition and driving up prices
Foreign buyers from Asia are increasingly targeting Stockholm's real estate market, and there are several reasons for this trend. First, the weak Swedish Krona has made real estate in Stockholm more affordable for international buyers, especially those from Asia. This favorable exchange rate is a significant factor in attracting Asian investors.
Additionally, Stockholm's stable economy and political environment make it an attractive location for foreign investors. The city's reputation as a safe and attractive place for investment is a major draw for those seeking reliable returns. This stability, combined with the economic resilience of Sweden, is appealing to international buyers.
Moreover, the growing wealth in Asia, particularly among Ultra High Net Worth Individuals (UHNWIs), is driving interest in stable and high-quality real estate investments. With the UHNWI population in Asia expected to grow significantly, there is a strong preference for investing in cities like Stockholm that offer economic stability and potential for growth.
Sources: Savills, Sovereign Group, RW Invest
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6) Property values in Stockholm's waterfront areas will rise significantly as climate change initiatives boost their attractiveness
In recent years, the waterfront areas of Stockholm have become increasingly attractive due to climate change initiatives. These efforts have led to significant investments in green infrastructure, such as the comprehensive stormwater system in Stockholm Royal Seaport. This system not only purifies and slows stormwater but also connects green roofs and rooftop gardens with ponds and urban greenery, enhancing the area's ecosystem.
Moreover, the Swedish Government's commitment to sustainable development, particularly in coastal and marine biodiversity, has provided financial support for projects that integrate environmental impact assessments into urban planning. This has made waterfront areas more resilient to climate change, reducing risks like flooding and improving water quality.
Consumer preferences have also shifted towards eco-friendly living environments. A 2023 survey showed that a large majority of Stockholm Royal Seaport residents frequently visit parks and natural areas, indicating a strong demand for such sustainable living spaces. This demand, coupled with media coverage highlighting the benefits of living in climate-resilient areas, has further increased the appeal of these properties.
Sources: Smart City Sweden, Norradjurgårdsstaden 2030
7) Rental yields in the southern suburbs will rise as young families look for affordable housing options
In recent years, Stockholm has faced a high demand for rental properties, with a significant shortage of available units. In 2023, there were 775,000 people on the waiting list for rentals, highlighting the scarcity of housing options. This shortage has led to a steady increase in rental prices, with a 4.5% rise in 2023 alone.
As Stockholm's population continues to grow, young families are increasingly seeking affordable housing options. This trend has been driven by both local and international migration, with 19,530 new residents added in 2023. Young families often prefer suburban living due to better living conditions, more space, and lower costs compared to city center apartments.
The southern suburbs of Stockholm are particularly attractive due to their higher average gross rental yields compared to other parts of the city. Areas like Nacka and Gullmarsplan, which are part of the planned metro expansion, are expected to see increased rental yields due to their proximity to central Stockholm and new infrastructure developments.
Historical trends in similar urban areas have shown that rental yields tend to increase as demand for housing outpaces supply. The planned metro expansion to Nacka and Gullmarsplan will significantly improve public transportation options, making these areas more attractive for young families and potentially driving up rental yields.
Sources: Global Property Guide, Sweco Group
8) Demand for homes near parks and recreational areas will grow as health-conscious lifestyles become more popular
In recent years, particularly in 2023 and 2024, there has been a noticeable shift towards a more health-conscious lifestyle among people in Stockholm. This change is evident in the rising statistics on outdoor activity participation, with 75% of the population engaging in moderate-to-vigorous physical activity for at least 150 minutes per week. This trend highlights the growing importance of outdoor activities and the need for accessible green spaces.
Moreover, consumer surveys have shown a strong preference for living near green spaces. Many Swedes are actively trying to reduce their consumption and embrace sustainable living, which often involves choosing homes close to parks and recreational areas. This preference is further supported by heightened media focus on the benefits of living near nature, which has increased awareness of the positive impact on mental and physical health.
Additionally, the Swedish government has been investing in park and recreational area development, aiming to enhance public health by improving access to nature. Urban planning initiatives prioritize green space accessibility, making it easier for residents to engage in physical activities. Real estate market reports also indicate higher property values near parks, attracting both young professionals and families who value the convenience and health benefits of such locations.
We made this infographic to show you how property prices in Sweden compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Co-living spaces will grow in popularity, affecting traditional rental markets in the city
In recent years, Stockholm has faced a significant housing shortage, with a waiting list of 775,000 people for rental properties by the end of 2022. This shortage has driven up the average rent, which increased by 4.5% to SEK 8,131 per month in 2023. These high costs make traditional rentals less accessible for many people.
Co-living spaces have emerged as a popular alternative, with businesses like COLIVE, LifeX, and Tech Farm offering community-based living solutions. The number of these spaces is expected to grow as developers respond to shifting housing preferences. This growth is particularly appealing to young professionals and students, a demographic that has been increasing in Stockholm due to both local and international migration.
Co-living spaces cater to the needs of urban dwellers who prioritize affordability, flexibility, and social connectivity. This aligns with the preferences of millennials and Gen Z, who are drawn to community and flexible living arrangements. Additionally, the high cost of traditional rentals, with average house prices reaching SEK 6.69 million in 2023, underscores the demand for more affordable options like co-living.
Successful models from other major cities show that co-living spaces provide innovative housing solutions, addressing the changing needs of urban dwellers. Media coverage highlights the benefits of co-living, such as increased affordability and social opportunities, which are particularly appealing to young professionals and students. The Swedish government has also shown support for innovative housing solutions like co-living to address the housing shortage.
Sources: Green Ocean Property Management, Global Property Guide
10) Suburban Stockholm property prices will rise as remote work makes these areas more appealing
In recent years, we've seen a significant shift in how people work, with remote work becoming more common. Back in 2022, over half of Sweden's working population engaged in remote work to some extent. This trend has continued to grow, influencing where people choose to live.
As more people work from home, there's been an increased demand for larger living spaces. Many young professionals in Sweden are looking for homes that can accommodate a home office, which often means moving to the suburbs where larger homes are more available. This demand has led to a need for 15,000 new homes annually in suburban areas.
Surveys have shown that families are increasingly interested in suburban living, seeking more space and a better quality of life. This shift is supported by improved infrastructure and transportation, making suburban areas more accessible and appealing. As a result, property prices in these areas have been on the rise, driven by high demand and limited supply.
Sources: Jobgether, Tillväxtanalys
11) Demand for versatile living spaces will grow as remote work becomes more common
As we look back at 2023 and 2024, we can see a clear trend in the way people are choosing to work and live. In Sweden, nearly 44% of employees were working from home in 2023, which is only slightly less than during the peak of the COVID-19 pandemic. This shift has led to a growing need for living spaces that can accommodate both personal and professional needs.
One of the key indicators of this trend is the rising sales of home office furniture and equipment. In Stockholm, the market for used office furniture has been expanding, with stores offering affordable options for those setting up home offices. This suggests that more people are investing in creating dedicated workspaces within their homes.
Additionally, consumer surveys have shown a strong preference for flexible living spaces. A study by Pew Research Center in early 2022 revealed that a significant number of people preferred to continue working remotely, highlighting the desire for homes that can adapt to different functions. This is further supported by real estate listings that emphasize home office features, making it easier for buyers to find properties with extra rooms or adaptable spaces.
Sources: Statista, View Stockholm, Scott Max
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12) Rental yields in central Stockholm will drop moderately as property prices rise faster than rents
Central Stockholm's real estate market is seeing some interesting changes.
In 2023, house prices in Greater Stockholm dropped by 6.3%, but by 2024, they had bounced back with a modest 2% increase. This suggests a stabilization phase, where property prices are still high and might continue to rise faster than rents.
On the rental side, the average rent in Stockholm went up by 4.5% in 2023, reaching SEK 8,131 (EUR 720) per month. This rent growth is slower compared to the past increases in property prices, hinting that rental yields could decline as property prices outpace rent growth.
Historically, rental yields in urban areas like Stockholm have been trending downwards. In the first quarter of 2024, gross rental yields in Sweden averaged 5.68%, but in major cities like Stockholm, they varied from 2.76% to 5.9%. This indicates that rental yields in Central Stockholm might keep decreasing.
For potential buyers, this means that while property values might be stable or rising, the return on investment through rental income could be less attractive. The high property prices are not matched by a similar increase in rent, which affects the overall rental yield.
Understanding these dynamics is crucial for anyone considering buying property in Central Stockholm, as the market's current state suggests a moderate decline in rental yields due to high property prices outpacing rent growth.
Sources: Global Property Guide, Cushman & Wakefield
13) Demand for senior-friendly housing in Stockholm's suburbs will grow as the population ages
In Stockholm, the proportion of people aged 65 years or older is significant, with 20% of the population in Sweden being 65 years or older, and this number is increasing. This means more people are entering the age group that typically requires senior-friendly housing.
Sweden has seen a rise in life expectancy, which contributes to an aging population. This trend is expected to continue, with the median age projected to increase by 2.6 years by 2050. As people live longer, the demand for housing that accommodates their needs will naturally grow.
The City of Stockholm has adopted an action plan for an elderly-friendly city, aiming to create an accessible and inclusive environment. This plan includes initiatives to improve housing options for seniors, indicating a governmental push towards developing senior-friendly housing.
Improved public transportation and infrastructure in suburban regions can enhance the livability of these areas for seniors, making them more attractive for senior-friendly housing projects. This makes suburban areas a practical choice for developing such housing.
Sources: Herald Open Access, City of Stockholm, Eurostat
14) Rental prices in Stockholm's outskirts will stay steady as new housing developments match demand
In recent years, the outskirts of Stockholm have seen significant new housing developments, such as the 264-home project in Skogås, Huddinge, and the 585-apartment project in Bromsten, Spånga. These projects, expected to be completed by mid-2025, are part of a broader effort to address the chronic housing shortage in the region.
The Stockholm municipality has been actively planning to increase the housing supply, with a forecasted need for 26,800 new homes annually until 2030. This proactive approach, combined with the Swedish government's increased housing allowance for families, makes suburban living more financially viable and attractive.
Moreover, historical data from other urban areas shows that when new housing developments are implemented to address shortages, rental prices tend to stabilize. This trend is supported by real estate market analyses predicting balanced supply and demand dynamics in the outskirts of Stockholm.
Sources: Barings, Residensportalen
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.