SwedenLivingWorld world_2_fill WorldBusiness BusinessSports sports-soccer SportsEntertainmentEntertain

Expert on record-high rent demands: "Ridiculous"

Private landlords in Stockholm County and Gotland want to drastically increase the rent – again. Unreasonable, believes real estate professor Hans Lind. It's ridiculous, when you know that wages haven't risen that much.

» Updated: 22 July 2024, 12:26

» Published: 22 July 2024

Expert on record-high rent demands: "Ridiculous"
Photo: Mickan Mörk/TT

Private landlords in Stockholm County and Gotland want to drastically increase rents – again.

Unreasonable, believes property professor Hans Lind.

It's ridiculous, when you know that wages haven't risen that much.

For 2024, property owners demanded a rent increase of twelve percent. But after negotiations, the rent increase landed at an average of five percent across the country, which was the largest increase in over 30 years, for the second year in a row.

And now, the industry organization Fastighetsägarna Stockholm has already gone out and demanded that rents be increased by up to 15.4 percent from next year.

I don't think it's serious when you want to increase that much, continues Hans Lind, retired professor of real estate economics.

If they had said ten percent, maybe they would have gotten a bit more weight in the negotiations. But this is just nonsense.

Clearer Legislation

The demand affects around 60,000 apartments in Stockholm County and Gotland. The motivation is that landlords have had increased costs due to rising interest rates.

But according to Louis Landeman, head of credit analysis at Danske Bank – it's going better for property companies right now, according to the half-year reports.

It's going better this year than before. Inflation has come down a bit and the financing situation has also improved quite a lot.

Admittedly, they still have high interest rate costs, but for example, property companies Rikshem, Castellum, and Balder all have significantly higher revenues and in several cases, increasing profits.

According to Hans Lind, it must become clearer in rent legislation what factors should be taken into account – when setting rent and what should weigh the most. If, for example, it's wages, interest rates, or energy prices.

If you take into account interest rates, then you should do it both when they go up and down, says Hans Lind.

Now the system is constructed as collective negotiations, without any kind of government guidance.

"Worth Overstating"

In the current situation, rent increases often end up in the middle of what the parties demand, describes Hans Lind.

The mediators are often not very knowledgeable, and then they tend to settle in the middle. So it pays to overstate and take more.

Hans Lind himself believes that wage development should govern rent increases.

I think the state should put its foot down and say that rents should follow wages. Then you can leave room for certain exceptions in special situations.

The fact that there are no clear guidelines is because, according to Hans Lind, it hasn't been needed before.

When we had two percent inflation, this wasn't a problem. And I don't think politicians are very good at solving problems that haven't yet arisen.

Tags
TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Yet Another Extremely Strong Report from Nvidia
2 MIN READ

Yet Another Extremely Strong Report from Nvidia

Better than expected for Nvidia
1 MIN READ

Better than expected for Nvidia

Department store giant sinks on Wall Street
1 MIN READ

Department store giant sinks on Wall Street

The FI's Advice: Have Accounts in Multiple Banks
1 MIN READ

The FI's Advice: Have Accounts in Multiple Banks

Break in Trend - Household Costs No Longer Rising
2 MIN READ

Break in Trend - Household Costs No Longer Rising

4,000 to Leave the Car Giant
1 MIN READ

4,000 to Leave the Car Giant

The VW Union Takes a Stand Against Factory Closures
1 MIN READ

The VW Union Takes a Stand Against Factory Closures

Slovakian Nuclear Power Plant Plan Approved
1 MIN READ

Slovakian Nuclear Power Plant Plan Approved

Giant boost for Turkish minimum wages on the way
1 MIN READ

Giant boost for Turkish minimum wages on the way

6 MIN READ

Reduced risk of power crisis in winter
1 MIN READ

Reduced risk of power crisis in winter

Trump's Minister Paves the Way for Quick Tariff Decision
3 MIN READ

Trump's Minister Paves the Way for Quick Tariff Decision

Tough times for Chinese car giant
1 MIN READ

Tough times for Chinese car giant

Double rate cut of Icelandic interest rate
1 MIN READ

Double rate cut of Icelandic interest rate

Down on the stock exchange for the fourth day in a row
1 MIN READ

Down on the stock exchange for the fourth day in a row

The Gaming Company's Stock Soars - Confirms Purchase Inquiry
1 MIN READ

The Gaming Company's Stock Soars - Confirms Purchase Inquiry

Japan Sets Tourist Record - Attracts increasing number of tourists
1 MIN READ

Japan Sets Tourist Record - Attracts increasing number of tourists

Denmark's economy is picking up.
1 MIN READ

Denmark's economy is picking up.

Unexpectedly high inflation in the UK
1 MIN READ

Unexpectedly high inflation in the UK

FI wants to see strengthened protection of financial companies
1 MIN READ

FI wants to see strengthened protection of financial companies