Sweden's housing crisis hits construction industry

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STOCKHOLM, Feb. 22 (Xinhua) -- Sweden's housing crisis is set to intensify, Swedish Television SVT reported on Friday.

For the first time in ten years, several construction companies have been forced to buy newly constructed apartments that failed to find buyers.

"It is a worse crisis now than ten years ago," said Anders Lago, federal chairman of Swedish housing association HSB.

In Stockholm, the crisis is expected to continue for several years. Other areas especially impacted are Uppsala, Vasteras and Orebro - places where a lot of construction has occurred in recent years.

In response, Sweden's construction companies are pulling the emergency brake on new housing projects.

"We've seen a halving of new construction projects this year compared with 2017 and 2018. This affects the Swedish economy. Perhaps there will be a decline in GDP by half a percentage point. And that slows down growth in Sweden," Lago told SVT.

Last autumn, HSB began to sell a number of apartments in the Stockholm area. But despite the fact that the price was reduced by as much as 20 percent, sales slowed and many apartments remained unsold.

As a result, HSB has been forced to buy 120 apartments to save the tenant-owner associations that would otherwise have struggled to cope economically. This is the first time this has happened since the 2008 global financial crisis.

The problem is widespread. According to research done by SVT, the largest construction companies in Sweden have been forced to buy back over 400 apartments in total.

According to new statistics from Swedish housing website Booli, almost 10 percent of newly built apartments currently on the Swedish market have been reduced in price.

The majority of price reductions have taken place in Stockholm, where prices have been reduced by over 16 percent.

This is because the wrong kind of apartments have been built, said the head of Sweden's largest construction company.

"If you look at the past few years, very expensive apartments have been built, especially in our big cities," Anders Danielsson, CEO of Skanska, told SVT. "There are apartments that most people cannot afford to buy or live in. As a result, there's now an oversupply of the most expensive apartments." Enditem

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