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Many homes are now sold for asking price


Published 26 September 2022 at 21.30

Economy. The bid premium – i.e. the difference between the starting price and the final price of housing – is now lower than it has been in many years after falling sharply in the last six months. In Stockholm and Malmö, the average villa was sold for the starting price during July.

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This is what a new survey from Länsförsäkringar Fastighetsförmedling shows, based on data from Svensk Mäklarstatistik.

– Rising interest rates, high inflation and exceptionally expensive electricity prices have caused many Swedes to hesitate before moving. The fact that the margins in the own housing economy have decreased sharply recently affects how far home buyers can go in a bidding, says Marcus Svanberg, CEO of Länsförsäkringar Fastighetsförmedling, in a press release.

After being between 6-14 percent in the last two years, the difference between the starting price and the final price of housing, the so-called bid premium, has now decreased significantly. In July, exceptionally low bid premiums were noted for both condominiums and villas, when buyers had to pay an average of 2 and 3 percent more than the starting price, respectively. In May 2021, the bid premium for villas reached a quotation of 14 percent. For condominiums, the bid premium was highest in February this year – 10 percent.

– Home buyers have already adjusted to a lower price level, and many who plan to sell their home need to get used to the idea that it is not worth as much as it was a few months ago. For us as real estate agents, it is important to try to set starting prices as accurate as possible so that both parties can feel secure through the housing transaction, says Marcus Svanberg.

Few bidding in the metropolitan regions stand out – in the last six months, the average for the bid premium was lower than the national average for both villas and condominiums. The bid premium was the lowest on the housing market in Greater Stockholm and Stormalmö during July, with a price increase of only 0.1 percent on average. This means that the average villa was sold for the asking price.

– It is still too early to say whether the result of the parliamentary election will in any way affect the housing market. But changed credit conditions could reduce the financial pressure on households, so it is positive that the Financial Supervisory Authority has been tasked with investigating both the mortgage ceiling and the amortization requirement, says Marcus Svanberg.