Will real estate prices in Sweden go up in 2025?

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Property prices in Sweden are showing modest recovery with annual growth of 2-5% as of June 2025, following a significant correction in 2022-2023.

After experiencing a sharp downturn that saw prices drop by nearly 16% from their 2022 peak, the Swedish property market has stabilized and begun to recover. The Riksbank's aggressive rate-cutting cycle, which brought the policy rate down to 2.25% by early 2025, has restored buyer confidence and increased transaction volumes across the country.

If you want to go deeper, you can check our pack of documents related to the real estate market in Sweden, based on reliable facts and data, not opinions or rumors.

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.

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We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Sweden. If you'd like to learn more about us, you can check our presentation page.

What are the current average property prices in Sweden as of June 2025?

Property prices in Sweden have stabilized after the 2022-2023 correction, with modest recovery underway.

As of mid-2025, the average house price in Sweden stands at approximately SEK 3.7-3.9 million (€317,000-€342,000), while apartments average around SEK 2.6 million (€228,000). Stockholm remains the most expensive market, with average house prices reaching SEK 6.7 million (€575,000) and apartment prices at €7,700 per square meter in the city center.

The market shows significant regional variations. While Stockholm County experienced a slight decline of 1.7% year-on-year, other regions are seeing stronger growth. Upper Norrland leads with 12.6% annual growth, followed by Northern Central Sweden at 8.5% and Southern Sweden at 6.4%.

In major cities, apartment prices per square meter vary considerably: Stockholm at €7,700, Gothenburg at €4,700, and Malmö at €2,750. These prices reflect a market that has found its footing after the sharp correction, with transaction volumes increasing by 16% in 2024 compared to the previous year.

The recovery is most pronounced in the apartment segment, which has shown stronger price growth than detached houses, particularly in urban areas where demand remains robust despite earlier economic headwinds.

How have Swedish property prices changed in the past 12 months?

Swedish property prices have shown a clear recovery pattern over the past year, marking a turnaround from the downturn.

Nationally, house prices increased by 2-3% year-on-year through early 2025, while apartment prices rose nearly 5%. This recovery follows the sharp correction of 2022-2023, when prices fell by approximately 16% from their peak. The turnaround began in late 2024 as the Riksbank's rate cuts started to take effect.

Monthly data shows consistent improvement, with quarter-on-quarter growth of 2.28% in Q3 2024. The apartment market has been particularly resilient, with Stockholm apartments rising 1.3% in February 2024 alone, and the broader Stockholm region seeing a 3.8% increase during the same period.

Transaction volumes provide further evidence of recovery. Home sales increased by 16% in 2024 compared to 2023, with both apartments and detached houses seeing increased activity. The number of completed housing units also jumped by 21% in 2023, reaching 65,600 units, which has helped balance supply and demand.

It's something we develop in our Sweden property pack.

Which Swedish regions are experiencing the highest property price growth in 2025?

Regional price disparities have become more pronounced, with northern and smaller regions outperforming major metropolitan areas.

Upper Norrland leads the country with an impressive 12.6% year-on-year price growth, driven by increased interest from remote workers and relatively affordable entry prices. Northern Central Sweden follows with 8.5% growth, while Småland with the islands and South Sweden both recorded 6.4% increases. These regions are benefiting from lifestyle migration trends and better affordability compared to major cities.

Stockholm County, traditionally the growth leader, actually experienced a 1.7% decline, suggesting a shift in market dynamics. This reversal reflects both affordability constraints in the capital and changing lifestyle preferences post-pandemic. Buyers are increasingly looking beyond major cities for better value and quality of life.

The trend indicates a rebalancing of the Swedish property market, with previously overlooked regions catching up to metropolitan areas in terms of desirability and investment potential.

What is the current mortgage rate situation in Sweden?

Mortgage rates have fallen significantly from their 2023 peak, providing crucial support to the housing market recovery.

As of June 2025, the average mortgage rate in Sweden is approximately 3.13%, down from over 4.6% in 2023. This decline follows the Riksbank's aggressive rate-cutting cycle, which has reduced the policy rate to 2.25% through multiple cuts totaling 175 basis points since 2024. Variable rate mortgages, which represent about half of all Swedish mortgages, have seen the most immediate benefit.

Major banks forecast that mortgage rates will continue to decline, with predictions ranging between 2.85% and 3.20% by the end of 2025. SBAB, Swedbank, and Länsförsäkringar Bank are aligned in expecting rates to stabilize around 3% through 2026, while Handelsbanken projects slightly higher rates at 3.2-3.3%.

The impact on affordability has been substantial. In 2023, new borrowers spent an average of 10.8% of their income on interest payments after deductions, with some paying as much as 17.5%. These figures are expected to improve significantly as rates continue to fall, making homeownership more accessible.

For potential buyers, the current rate environment represents a significant improvement from the recent past, though rates remain well above the ultra-low levels seen during 2020-2021.

How do current prices compare to 5 and 10 years ago?

Swedish property prices have experienced dramatic swings over the past decade, with current levels reflecting both long-term growth and recent volatility.

Compared to five years ago (2020), Swedish house prices are approximately 10% higher despite the recent correction. This includes the pandemic-era surge of 27% between 2020-2022, followed by the 16% decline in 2022-2023. The net result shows that even after the correction, properties have retained most of their pandemic gains.

Over the ten-year horizon, the growth is even more impressive. House prices have more than doubled since 2015, with a nominal increase of approximately 110%. This represents one of the strongest performances among European markets, driven by urbanization, population growth, and until recently, ultra-low interest rates.

The decade-long trend masks significant volatility. The 2015-2021 period saw almost uninterrupted growth, with prices rising steadily year after year. The 2022-2023 correction was the sharpest since 1993, demonstrating how quickly market conditions can change when interest rates rise rapidly.

Despite recent turbulence, Swedish property remains significantly more expensive than a decade ago, reflecting fundamental supply-demand imbalances in major urban areas.

What types of properties are seeing the strongest price growth?

Different property segments are showing varied performance, with clear winners emerging in the recovery phase.

Apartments are leading the recovery with nearly 5% year-on-year price growth in early 2025, outpacing detached houses at 3.1%. This trend is particularly pronounced in urban areas where apartments dominate the market. Tech-equipped, energy-efficient apartments in cities like Stockholm and Gothenburg are seeing the highest demand and strongest appreciation.

Within the apartment segment, smaller units in central locations are performing particularly well. Studios and one-bedroom apartments in Stockholm's trendy neighborhoods like Södermalm and Vasastan are attracting young professionals and investors, driving prices higher despite the overall Stockholm market lagging behind national averages.

Energy-efficient properties with high sustainability ratings are commanding premium prices across all segments. Properties with features like heat pumps, solar panels, and superior insulation are selling faster and at higher prices than conventional homes, reflecting growing environmental consciousness among Swedish buyers.

It's something we develop in our Sweden property pack.

Larger suburban homes suitable for families are also performing well, particularly in areas with good schools and transport links. The shift toward remote work has made these properties more attractive, as buyers seek more space without sacrificing urban connectivity.

What are analysts predicting for Swedish property prices in 2026?

Market forecasts for 2026 suggest continued but moderate growth as the market finds its equilibrium.

Most analysts expect Swedish property prices to rise by 2-5% annually through 2026, with variations depending on location and property type. CBRE Sweden forecasts a 10% increase in real estate investment activity in 2025, which typically correlates with price appreciation. The consensus view is that the dramatic volatility of recent years will give way to more stable, sustainable growth.

Regional differences are expected to persist. Stockholm and other major metropolitan areas are predicted to see annual growth of 2-3%, while smaller cities and northern regions could experience 4-6% appreciation. This reflects the ongoing rebalancing of the market away from the traditionally dominant capital region.

Several factors support these optimistic forecasts: continued Riksbank rate cuts, improving household finances, GDP growth projected at 2.3% for 2026, and persistent housing shortages in urban areas. However, analysts also warn of risks including global economic uncertainty, potential changes to mortgage regulations, and the possibility of renewed inflation.

The apartment market in major cities is expected to outperform, driven by urbanization trends and limited new supply due to the ongoing construction crisis (byggkris) that has reduced new project starts.

How has the Riksbank's monetary policy affected property prices?

The Riksbank's dramatic policy shifts have been the primary driver of property market volatility over the past three years.

The central bank's aggressive rate hikes from -0.50% in 2019 to 4.0% in September 2023 triggered the sharp property market correction. Swedish households, with their preference for variable-rate mortgages, felt the impact immediately. Property prices fell 16% as borrowing costs soared and buyer confidence evaporated.

However, the Riksbank's subsequent pivot has been equally dramatic. Starting in May 2024, the bank has cut rates by 175 basis points through six consecutive reductions, bringing the policy rate to 2.25% by early 2025. This makes the Riksbank one of the most aggressive rate-cutters among major central banks, reflecting concerns about economic growth and confidence that inflation is under control.

The impact on the property market has been swift and positive. Transaction volumes increased 16% in 2024, mortgage applications have surged, and price growth has resumed. The central bank has signaled that further cuts are possible if economic conditions warrant, with some analysts expecting the rate to reach 2.0% by late 2025.

This monetary policy stance has effectively put a floor under property prices and restored market confidence after the sharp correction.

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What economic factors are currently influencing Swedish property prices?

Multiple economic indicators are aligning to support the property market recovery in 2025.

Inflation has stabilized near the Riksbank's 2% target at 2.3% as of June 2025, removing a major source of uncertainty. This stability has allowed the central bank to focus on supporting growth rather than fighting inflation. GDP growth is projected at 1.6% for 2025 and 2.3% for 2026, providing a solid foundation for housing demand.

The labor market remains relatively stable with unemployment at 8.4%, though this is higher than pre-pandemic levels. More importantly, real wages are beginning to recover as inflation has moderated while nominal wage growth continues. This improvement in purchasing power is crucial for housing affordability and buyer confidence.

The Swedish krona's weakness against major currencies has created an interesting dynamic. While it makes imports more expensive, it has also attracted foreign property investors, particularly from neighboring Nordic countries and Germany. Foreign ownership of Swedish holiday homes increased by 6.3% in 2024, adding demand to certain market segments.

Consumer confidence indicators have improved throughout 2025, though households remain cautious due to high debt levels and recent economic volatility. The household debt-to-income ratio remains among the highest in Europe, making the market sensitive to interest rate changes.

Are there differences between urban and rural property markets?

The urban-rural divide in Swedish property markets has never been more pronounced, with surprising winners emerging.

Traditionally dominant urban markets like Stockholm are experiencing the slowest growth or even slight declines. Stockholm County saw a 1.7% price decrease year-on-year, while apartments in central Stockholm managed only 0.6% growth. This represents a dramatic reversal from the pre-pandemic era when Stockholm consistently led national price growth.

Conversely, rural and northern regions are experiencing a renaissance. Upper Norrland's 12.6% growth leads the nation, driven by remote work adoption, lifestyle migration, and significantly lower entry prices. A house in Upper Norrland averages SEK 2.48 million compared to SEK 6.7 million in Stockholm, making these regions attractive for first-time buyers and those seeking better value.

Mid-sized cities are finding a sweet spot, offering urban amenities without metropolitan prices. Cities like Uppsala, Linköping, and Örebro are seeing increased demand from buyers priced out of Stockholm or seeking better quality of life. These markets typically offer 30-50% lower prices than Stockholm while maintaining good employment opportunities and infrastructure.

The trend reflects fundamental shifts in how Swedes view property ownership, with lifestyle factors increasingly outweighing pure investment considerations in location decisions.

How does the Swedish property market compare to other Nordic countries?

Sweden's property market recovery positions it uniquely among Nordic peers in 2025.

In terms of absolute prices, Stockholm remains competitive with other Nordic capitals. At €7,700 per square meter for apartments, Stockholm is slightly more expensive than Oslo (€7,430) and significantly pricier than Copenhagen (€6,350) or Helsinki (approximately €5,500). However, this gap has narrowed following Sweden's recent correction while other markets continued rising.

Sweden's price growth of 2-5% annually is more modest than some regional peers. Norway and Denmark have seen more stable, consistent growth without Sweden's dramatic correction, while Finland's market has remained relatively flat. The key difference is Sweden's higher exposure to variable-rate mortgages, making it more sensitive to interest rate changes.

Over the past decade, Sweden's 110% nominal price increase exceeds most European markets, though this includes the recent volatility. Denmark and Norway have seen steadier but ultimately lower cumulative growth. This makes Sweden both a cautionary tale about market cycles and an example of long-term appreciation potential.

It's something we develop in our Sweden property pack.

For international investors, Sweden's market offers better value after the correction, particularly with the weak krona enhancing purchasing power for foreign buyers.

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.

What impact are construction costs and supply having on prices?

The Swedish construction crisis (byggkris) is creating supply constraints that support price growth despite economic headwinds.

New construction starts have plummeted due to high building costs, expensive financing, and economic uncertainty. Building permits declined sharply in early 2023, and while there's been a slight uptick in 2024-2025, the pipeline of new projects remains well below historical averages. This supply shortage is particularly acute in major urban areas where demand is highest.

Construction costs have increased dramatically due to inflation, higher material costs, and stricter environmental regulations. Developers report that many projects are no longer financially viable at current price levels, leading to postponements or cancellations. This dynamic is expected to persist through 2026, limiting new supply and supporting prices for existing properties.

The completion of previously started projects provides some relief. In 2023, 65,600 new apartments were completed, up 21% from the previous year. However, this represents the tail end of projects initiated during the boom years, and future completions are expected to decline significantly.

For buyers, this supply constraint means less choice but also more stable prices. For the market overall, it suggests that even modest demand growth could lead to price pressure, particularly in popular urban areas where new construction is most constrained.

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.

Sources

1. Global Property Guide - Sweden's Residential Real Estate Market Analysis 2024
2. Trading Economics - Sweden Real Estate Price Index
3. CBRE Sweden - Real Estate Market Outlook 2025
4. Statsskuld - Mortgage Interest Rates in Sweden 2024-2026
5. Investropa - 17 Strong Trends for 2025 in the Sweden Property Market
6. Statista - Average Cost of Apartments in Sweden 2024
7. Nordea Corporate - Swedish Housing Market Analysis
8. The Local - Swedish Property Price Drivers in 2025
9. International Banker - Sweden's Housing Market Analysis
10. Statistics Sweden - Real Estate Prices and Registrations