– There is a huge difference now compared to before the interest rate increases. Then the association’s finances were almost a non-issue for the buyers, says Johan Nordenfelt, information manager at Erik Olsson Fastighetsförmedling.
Speculators are particularly interested in the association’s loans, says Marcus Svanberg, CEO of Länsförsäkringar real estate agency.
– Above all, people ask about the loan-to-value ratio, and we didn’t get so many questions about that before.
While private individuals to a greater extent have variable loans, housing associations often have loans tied in for many years. This means that there are still associations that still have cheaper loans and that now have to tie these up at a higher interest rate.
Reduced savings and maintenance
Housing associations collect the increased interest costs through higher monthly fees. Several associations have also reduced their savings and now also make lower provisions for planned maintenance, according to a report from Nabo, which sells accounting services to roughly 3,000 of Sweden’s condominium associations.
– I clearly see that the need for provisions for maintenance costs has increased at the same time that savings are decreasing. This is despite the fact that the associations have achieved record-high revenue increases from membership fees and premises, says Jonas Gustavsson, expert in financial management at Nabo.
The consequence is that future members have to pay for current members’ accommodation.
– It can be difficult from a private financial perspective to justify higher fees for maintenance that is 50 years in the future, even if it is fair to do so, says Gustavsson.
This is how you can compare the economics of condominiums
Since 2023, there are several new key figures in the annual reports that make it easier to compare different associations with each other.
The association must, among other things, print the loan-to-value ratio per square meter, savings per square meter and interest sensitivity, that is, how much the fees would have to be increased if the association’s interest charges are increased by one percent.
What should be reviewed in an annual report? See three tips from the experts in the video above.