Sweden has an Achilles Heel - a property market where banks have lent more than 4 trillion Swedish to homeowners

Weighed down by these home loans, Swedes are twice as heavily indebted as Germans or Italians.

Earlier this year, the International Monetary Fund flagged Sweden's historically high household borrowing coupled with debt-driven commercial property firms and their dependence on local banks as a financial stability risk.

Roughly half of Swedish homeowners have floating-rate mortgages, meaning rate hikes quickly trigger higher bills for them.

Its developers, meanwhile, often relied on shorter-term loans or bonds that have to be replaced with pricier credit.

Heimstaden Bostad, a $30 billion property investor with swathes of homes from Stockholm to Berlin, is grappling with a multibillion dollar funding crunch, which has rebounded on one of its owners - the country's biggest pension fund.

The property crisis accelerated this month when pension fund Alecta, which owns a 38% stake in Heimstaden Bostad, said Sweden's biggest residential landlord needed cash and it may contribute.

Reuters 15 September 2023


Heimstaden Bostads huvudägare Alecta, Folksam och Ivar Tollefsens ägarbolag Heimstaden AB



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