Young renters in Scandinavia face challenges in moving towards homeownership

Recent findings show that the number of young renters in the housing market has significantly decreased in recent years. A survey revealed that many of these young tenants are increasingly relying on personal savings to purchase their first homes.

Currently, only one in ten young renters feels prepared to buy a property within the next twelve months. Nearly half expect it will take longer, but some believe they can transition to homeownership within the next five years. Approximately 20% of renters under 35, however, do not anticipate leaving the rental market.

The overall percentage of individuals wishing to remain in the rental market has also fallen. Seven years ago, about a third of renters expressed a desire to rent long-term, whereas now less than one in ten share that sentiment. Almost half of renters are renting from private individuals, typically experiencing greater insecurity than other groups within the rental sector.

In terms of rental costs, prices have increased faster than property values. Recently, rental prices decreased by 1% from the previous month, marking the first decline this year. However, over the past twelve months, rental prices surged by over 12%, outpacing inflation. The most common rental price range is between 200,000 and 259,000 krónur monthly, with 35% of all apartments falling within that bracket.

Interestingly, the rental market is seeing a higher presence of university-educated individuals. Their disposable incomes have risen by 15% year-over-year, allowing more renters to save for future home purchases. Reports indicate a decrease in renters facing payment difficulties, dropping from 21% to 15%, and those who have managed to save money have increased from 37% to 41%.