Biggest rent increases – in 30 years: “Unbelievably tough”

Rents in Sweden are increasing by an average of 4.2 percent this year, the largest increase in 30 years, according to the Tenants’ Association.

– It has been an incredibly tough and long round of negotiations, says the head of the union Erik Elmgren.

With agreements on rent increases for almost 1.1 million apartments in place, Erik Elmgren sums up the rent increases as reasonable – even though many members are already having a tough time in the inflation shock.

– It’s not just the rents that are going up. There is high inflation. Food prices are high. It is a cost of living crisis, he says.

“We have taken our responsibility”

According to Elmgren, rents are paid for roughly SEK 115 billion per year in Sweden. This makes rents – in the shadow of wages – an important so-called anchor for the now unusually high inflation.

– And rent increases will stay at 4.2 percent, which is actually well below core inflation. So I think we have taken our responsibility, says Elmgren.

The property owners began the negotiations with requests for rent increases of 10 percent in the fall of 2022, to cover at least parts of the interest rate hike and other cost increases for the landlords.

– But we have a system for setting rents where the parties are not equal, notes Tomas Ernhagen, chief economist at Fastighetsägarna.

The tenants don’t have to

He compares this year’s rent increases for a normal sale, which he says will be SEK 300-350 per month, with the cost increase of perhaps SEK 12,000-14,000 per month that affects households with a normal-sized loan for three rooms and a kitchen in a condominium.

– Those cost increases also exist when it comes to rental properties. But the tenants don’t have to take that. The landlord can take that instead, he says.