Eye Scandie W


hile the rest of the world remains in crisis, housing markets in Scandinavia


have been motoring. The RICS, in its European Housing Survey, referred to the paradox of a “hot North” and “cold South”; for the second year running Sweden, Norway and Finland are at the top of the housing table, and Denmark, which saw price falls in 2009, has now joined them. According to Knight Frank,


2011 should see further price rises, with Norway likely to rise four per cent while Sweden was predicted to rise by as much as six per cent (compared with a Spanish market still in reverse gear) and only two per cent increases in UK housing prices.


52 JUNE 2011 PROPERTYdrum


The Great Outdoors – there are miles and miles of it in Scandinavia.


Seeking a rising market? Pining for the fjords? Check out Scandinavia, says Andrea Kirkby.


In fact, so well have prices


performed that there’s currently a hot debate in Sweden about whether the country is in a housing bubble. Interest rates have gone up six times since July (though they’re still only 1.75 per cent), and a new mortgage cap has been introduced by the Riksbank (limiting loans to 85 per cent of a property’s value). The northern markets have a


number of similarities. They are all highly advanced economies, with a high standard of living and a relatively high cost of living; they tend to be relatively highly regulated (for instance with regard to rentals) and have high taxation compared to some other destinations. Three of the four are within the European Union (Norway isn’t, but belongs to the EEA and EFTA) and only one (Finland) uses the Euro. Another similarity, which might help explain their outperformance, is that unlike the ‘PIGS’ markets (Portugal, Ireland, Greece and Spain) they have relatively low government deficits, the EU has now removed both Finland and Denmark from deficit monitoring. However, Denmark pegs its


currency to the Euro, and interest rates across the area tend to mirror the Eurozone. Indeed Sweden went one better than the ECB in reducing rates after the credit crunch, and for some time recently had the lowest


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