Sweden's Tenant-Owner Association Centre (SBC) notes in its latest edition of the BRF-index that the cost situation now looks significantly better. This is after many associations were forced to raise monthly fees for residents sharply to cover rising costs.
We raised, but did not take full coverage for all costs. Now we see that the associations are starting to catch up, and it is clear that the interest rate decrease contributes, says Markus Pålsson, head of business innovation and development at SBC, about the cost development.
During the first quarter, the operating costs for what SBC considers an average tenant-owner association amounted to approximately 700,000 kronor, a decrease of 3 per cent compared to the same quarter the previous year.
However, from SBC's side, one sees that it is of great importance that the associations do not lean back, especially not considering the uncertain economic situation.
We still believe that the associations need to work more actively, but we see a greater engagement from members and the board to understand and grasp the economy than a couple of years ago when it was a low-interest period, says Markus Pålsson.
A series of decreases
The big question for the associations, just like for the individual tenant-owner, is naturally how it will be with the interest rate going forward. After a series of decreases from the Central Bank, clear signals were sent that it was now finally decreased. When President Donald Trump's trade war then broke out, several actors such as Handelsbanken and SBAB have recently signalled that it may actually lead to several decreases. For example, Swedbank believes in three decreases to below 2025.
Want advice
Many associations are now turning to SBC for advice on how to act, bind parts or the entire loan – or perhaps choose a floating rate? Markus Pålsson points out that there is no answer, and each association must also consider its own situation.
There is a great uncertainty, where are we heading somewhere? As a board and association, one must think about what interest rate level one can handle. It's about working actively and then things will happen that we cannot influence and being quick to act.
