The Swedish rental market has changed a lot over the last year. Not only did we notice a huge increase in sophisticated scams (see NRG newsletter 2023-02-24), the 400% increase in interest rate on bank loans also affected the rental market a lot. Many private landlords that invested in the very expensive real-estate market when the interest rate was low are now facing a massive increase in cost of living.
It used to be very rare that a landlord renegotiated a lease agreement before it expired. With over 18 years of experience this only happened 2 times in the past for one of our more senior mobility experts. During the last year the same consultant have had over 10 cases where landlords try to increase the rent due to the fact that they are now losing money when renting out. This makes it very inconvenient for tenants that are renting a property second hand and after only 6 months has a landlord who wishes to increase the rent with over 20%. Unfortunately the landlord has the right to renegotiate the lease and if not approved by the tenant the landlord has the right to cancel the lease with 3 full months of notice. So either the tenant has to accept the new rent or deny the landlords request and risk getting resign and be forced to go through the whole inconvenient process of finding a new rental apartment.
The increase on interest has also affected the real-estate market hugely, fewer people purchasing a property so never in history has so many properties been out for sale at the same time. This is both good and bad viewed from a rental market perspective.
The good news is that very few properties are sold and instead landlords try to rent them out. This means that more properties comes out on the rental market and for the first time in years we are starting to see the rents going down. Please note that over the last year alone the prices on the rental market increased with over 20% so a few percentage decrease is not a lot, but it’s a start. The increase of rental properties on the market has also made it so that for the first time we are seeing landlords renting out their property at a loss.
The bad news is that landlords who want to sell will often only rent out their property until the real-estate market recovers. Meaning that a landlord can cancel the lease at any time (3 full month notice) if they get the right offer from a buyer.
Despite these challenging times, NRG successfully matches our clients with suitable rental accommodations on a daily basis.
Nordic Relocation Group