Still high pace of housing completion

All is not dark in the housing construction market. At least not in the short term. The number of completed homes has maintained a high pace in both 2022 and it will continue at this high level in 2023 according to the Swedish National Board of Housing, Building and Planning's forecast.

In both years, over 60,000 homes could be completed, of which over 30,000 are rental apartments and approximately 17,000 are condominiums in apartment buildings. It is the high rate of housing projects started during 2020-2021 that is now in the completion phase. The main slowdown in the number of completed homes will now occur from 2024 onwards, which will negatively affect sales of white goods.

The number of housing starts is decreasing sharply

The number of homes with start notices will decrease according to the Swedish National Board of Housing, Building and Planning's forecast from approximately 71,500 in 2021 to approximately 33,000 in 2023, including net additions through renovations. However, they also state that the uncertainty interval in this forecast is large.

Forecast for number of housing starts

	2021	2022p	2023p
Housing category
Apartment building	54 600	44 000	23 000
– Tenancy rights	20 700	17 000	8 800
– Rental property	33 400	26 000	14 000
– Ownership	500	1 000	200
Small house	13 800	12 500	8 500
Total new construction	68 400	56 500	31 500
Net additions through renovation	3 100	2 500	1 500
Total housing starts	71 500	59 000	33 000

Source: Statistics Sweden and the Swedish National Board of Housing, Building and Planning's indicators December 2022

Demand for new tenant-owned apartments and single-family homes has fallen sharply after the first half of 2022. This affects the willingness to start new housing projects and the Swedish National Board of Housing, Building and Planning therefore expects a rapid decrease in the number of construction starts for tenant-owned apartments, especially for housing developers with a weak financial position. The construction of single-family homes will decrease especially after the first half of 2023, the Swedish National Board of Housing, Building and Planning predicts.

The start of construction projects for rental apartments is also negatively affected by the financial turmoil and increased financing costs, which leads to a rapid slowdown in the construction of these. Private companies will have a cautious attitude towards the start of new production based on the uncertainty that prevails in the economy. Public construction is less affected and will be able to develop somewhat better, but normally accounts for a small proportion of planned production.

Text: Kent Oderud

Market development