Regions with the Most Significant Increases in Vacation Home Prices
The demand for vacation homes surged during the pandemic, but as travel restrictions were lifted and inflation began to rise, the market faced a sharp downturn. Many prospective buyers stepped back, while an increasing number of sellers emerged. However, recent data from Svensk Mäklarstatistik, compiled by Fastighetsbyrån, indicates a recovery in the market over the past year.
According to industry experts, the vacation home market is more sensitive to economic fluctuations compared to permanent housing. The pressures of inflation and rising interest rates significantly impacted this sector. Yet, the recent reductions in interest rates have led to renewed interest among buyers, as noted by Johan Engström, CEO of Fastighetsbyrån.
Nationally, vacation home prices have increased by five percent over the past year, with a more substantial rise of 32 percent over the past five years. This growth rate is nearly double that of permanent residences during the same period, which is attributed to the unique circumstances surrounding the pandemic that drove demand to unprecedented levels.
There are notable disparities in price changes across different regions. In Stockholm, the largest market in terms of sales volume, prices have remained relatively stable over the past year. In contrast, Gävleborg and Värmland have experienced the highest increases, both recording price surges of 33 percent. Over five years, Kronoberg and Jämtland have seen the most dramatic price hikes, largely influenced by a surge in buyers from Germany and Norway.
Engström emphasizes the importance for buyers to conduct thorough research before making a purchase. Rushed decisions can lead to overpayments or overlooking critical details. He advises potential buyers to create a detailed wish list and take the time necessary to evaluate options carefully, as emotional impulses can cloud practical judgment.
One recent buyer, Sandra Linder, who operates the Instagram account Ekonomimamman, shared her experience purchasing a small cottage in Värmland last summer. Initially, the idea of acquiring a vacation property had been on her mind for some time, but it wasn't until she saw the cottage on a rainy day that she felt compelled to make the purchase.
She highlighted the need for a retreat where she could disconnect and enjoy simple living, emphasizing a desire to escape the pressures of daily life. To navigate the purchasing process, Linder opted to place a concealed bid with a condition for expedited contract signing, a strategy she found effective to avoid prolonged bidding wars.
After her first concealed offer was rejected, her second bid was accepted, although the process became tense as other bidders emerged just before the contract signing. Linder noted that certainty only comes with the signed agreement, illustrating the competitive nature of the market.
Looking ahead, her family is excited about spending the summer at their new property and plans to undertake gradual renovations. They appreciate the flexibility of not living there full-time, allowing them to take their time with improvements. For example, she has already sourced items for the kitchen through Facebook Marketplace, emphasizing the joy of reusing and creating a cozy space.
Tips for Purchasing a Vacation Home:
- Ensure you have a loan approval in place. Some buyers also consider leveraging their existing home equity if applicable.
- Account for additional costs such as property transfer fees, mortgage fees, and other associated expenses.
- Prepare a realistic budget that includes potential increases in mortgage payments, insurance, utilities, and waste management services.
- Maintain a financial buffer for unexpected costs and future renovations.
- Verify with local authorities to ensure the property complies with any zoning regulations or restrictions that might affect its use.