Published 21 January 2024 at 14.21
Economics. A growing share of the Swedish condominium associations' loans have variable interest rates – a way of trying to cope with the higher interest rates when the associations' old loans with long maturities expired last year. Now the price race for condominiums is predicted to continue.
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Variable interest rates have become more common among condominium associations and in November 2023 the proportion of loans with variable interest rates was 23 percent, compared to 16 percent in January 2021.
– You can also see that variable is the fixed interest rate period that has increased the most among condominium associations compared to other fixed periods, says Johannes Andersson, national economist at Statistics Sweden.
Despite that the interest rate is formally quite high in Sweden, with a key interest rate of 4 percent, most condominium associations still pay low interest rates.
The associations that have an interest rate of three months to one year pay on average 1, 97 percent in interest, according to Statistics Norway. Those loans account for approximately 17 percent of the condominium associations' total loans.
It is now in a hurry for the Riksbank to lower the interest rate if the associations do not have to retake these loans with around 5 percent interest instead. Something that risks doubling the fees for many home owners.
– In the coming months, both younger and older housing associations will have to adapt to higher interest costs if interest rates remain at the same level, says Johannes Andersson at Statistics Norway.
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23 percent of Swedish households live in condominiums. In November 2023, housing associations in Sweden had loans totaling SEK 575 billion, a doubling compared to November 2010.