Interest rates prompt shift in buyer focus at housing cooperatives in Sweden

There is a significant difference now compared to before the interest rate hikes, according to Johan Nordenfelt, information manager at Erik Olsson Real Estate Brokerage. Buyers are particularly interested in the financial aspects of housing cooperatives, with many now inquiring about borrowing rates, which was previously not a major concern.

While individuals often have variable-rate loans, housing cooperatives typically have loans locked in for many years. This results in some cooperatives still retaining cheaper loans that must now be refinanced at higher rates. To offset increasing interest costs, cooperatives are raising monthly fees and reducing savings for future maintenance. A report from Nabo, which provides accounting services to over 3,000 housing cooperatives in Sweden, indicates that this trend is widespread.

Jonas Gustavsson, an economic management expert at Nabo, notes that the need for maintenance fund allocations has grown even as savings decrease. Despite record revenue increases from membership fees and rental income, future members may ultimately have to cover the costs incurred by current residents. Gustavsson explains that justifying higher fees for maintenance that will be required decades later can be challenging from a personal finance perspective.

Since 2023, new key figures in annual reports have made it easier to compare different cooperatives. They are now required to disclose metrics such as debt per square meter, savings per square meter, and interest sensitivity, indicating how much fees would need to increase if interest payments rise by one percentage point.