Homebuyers are canceling bookings for new homes at a record pace

2023-09-02 10:30:00

Real estate market in Sweden

The construction companies are trying to counteract the negative trend with various measures.

(Foto: Bloomberg/Getty Images)

Stockholm The turbulence on the Swedish real estate market is not abating: As the state mortgage bank SBAB announced on Friday, more and more prospective buyers are canceling their reservations for a new apartment. “The situation with sales and bookings of new properties is catastrophic,” said SBAB’s chief economist, Robert Boije.

According to him, 65 percent of the contracts for planned new apartments were terminated in the past six months. In recent years, the cancellation rate has been around 20 percent. Even the cancellation costs did not deter prospective buyers from breaching the contract. Such a high number of cancellations has not been seen since 2014, says Boije.

The reason for the reluctance to buy is complex: above all, the high mortgage interest rates combined with significantly higher inflation have deterred many prospective buyers. The weak Swedish krona has also increased construction costs by up to 20 percent in some cases, so that prices have not fallen as much as initially assumed, despite falling demand.

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