This report is part of PERSPECTIVES, a comprehensive look into the world of prime residential real estate. Access the full report here to discover the latest trends and dynamics shaping the market.
In Sweden, progressive thinking and sustainability are a way of life, and in Stockholm, the high-end real estate market is a prime example.
Beqo Hoti of Shaza Luxury Real Estate says he anticipates sustainability will be key to motivating home buyers in the capital city. Real estate developments that leverage technology and innovation to improve quality of life will perform well this year, he predicts.
“Innovation and urban planning is going to be a huge force for luxury property,” Hoti says. “It will attract both residents and investors.”
Developments in places such as Gothenburg, on Sweden’s southwest coast, are proving to be the most resilient, attracting large institutional funds, private equity and venture capital money in an otherwise turbulent market, Hoti says. His firm, Shaza Real Estate, is involved with several new developments across Sweden as well as with several luxury projects overseas.
With inflation reaching as high as 12%, rising interest rates and soaring consumer debt, 2023 was a relatively lackluster year for luxury real estate in Sweden. The cooldown comes after nearly two decades of uninterrupted growth in prices.
Transaction volume was down SEK 90 billion (US $8.6 billion) in 2023, Hoti says, nearly 60% lower than in the previous year. Foreign investment, meanwhile, dropped from 29% to 21% in the same period, he adds. The Russian-Ukraine war also heightened tensions, contributing to uncertainty among buyers.
Still, with any downturn comes opportunity.
Norra Tynningövägen 5 ,Vaxholm. Presented by Shaza Luxury Real Estate
“You can get places in Sweden that are beautiful and have a great location for a very good price, compared to if you would buy something in Miami or Dubai,” Hoti says. “The value of location and property you get is a great opportunity for investors.”
Case in point: a waterfront villa in Stockholm with its own jetty, wine cellar and jaw-dropping views is on the market for SEK 32.8 million or US $3.1 million. A comparable home in Miami could sell for twice that.
Stockholm and other Swedish cities could see an influx of new buyers as the country in March became a member of NATO. Formal acceptance by the alliance could lead to an increase in demand for quality housing and potentially boost foreign investment in Sweden, Hoti says.
In neighboring Finland, its recent entry into NATO led to an increase in foreign investment as perceived risk in the country dropped. It’s possible a similar scenario could play out in Sweden.
Optimism is on the rise as 2024 unfolds. In December 2023 the number of homes sold in Sweden increased by 8%, compared with the previous three months. And in some upscale neighborhoods, such as the coveted Östermalm in the Stockholm city center, listings near US $12 million are emerging.
Although it’s likely that major improvements in the luxury real estate market won’t occur until the later half of the year, Hoti says he anticipates seeing “more housing deals and prices start to turn upward again.”
