2023.08.29

Housing construction is plummeting

As a result of the deteriorating economic situation in Sweden, housing construction is now plummeting throughout the country – both in the metropolitan regions and in the rest of the country. The counties that have so far managed with the lowest reductions are Örebro, Norrbotten, Gävleborg and Halland. In the rest of the country, the reductions are more dramatic. 

First half-year decline of 57 percent

During the first half of 2023, construction began on 14,550 apartments, according to recently presented statistics from Statistics Sweden. This is a decrease of approximately 57 percent compared to the same period in 2022, when a total of 33,805 homes were started.

Of these, 11,050 apartments were started in apartment buildings, which is 58 percent fewer than in the first half of 2022. Of these, 71 percent are estimated to be prepared to be let as rental apartments. The number of single-family homes started fell by 53 percent to 3,500 construction starts.

Redevelopment provides positive contribution

Contrary to the trend, however, started renovations of homes resulted in an addition of 2,500 during the period. This can be compared with an addition of 1,441 apartments during the first half of 2022.

Byggfakta's latest report shows that the decline in construction starts appears to have leveled off in recent months. According to their Construction Starts Indicator, construction starts did not decrease by more than a total of 0.3 percent between April and May. The construction start indicator for housing was also unchanged in July, the first month since the summer of 2021 that the indicator did not decline. The overall construction rate thus appears to have stabilized somewhat (at a low level) during late spring and summer, according to their analysis.

Byggfakta points out that construction starts for commercial premises, community properties and industrial premises have increased rapidly in recent years and are now leveling off at a high level in 2023. The largest contributions to this high level come from construction starts for office, logistics and healthcare projects in the country.

Affects the white goods market

Deliveries of white goods to homes and laundry rooms in new construction are very late in the construction chain – often very close to the time when the new homes are occupied. Therefore, the larger volumes have not yet been affected by this decline in new starts. Currently, deliveries are being made to new construction that is being completed at a fairly high level so far and to replacements in existing homes. However, delivery volumes to new construction will decrease for the industry in the coming years as fewer housing projects are completed. Unless an economic turnaround occurs quickly…

Text: Kent Oderud