A forum hosted by the Swedish Investment Fund Association (Sifa) on 12 June will tackle the question of young people saving to buy a residential property, and whether the Norwegian BSU regime stands as a valid model to copy as a way to also encourage savings via investment funds.
The event, which takes place at Sifa’s headquarters in Stockholm, will include speakers such as:
- Fredrik Nordström, chief executive of Sifa, who will outline a recent web survey on the issue,
- Linn Matic, head of Sociopolitical – Housing Policy at HSB, the constructor and provider of residential units under leasehold and other forms, who will discuss what Swedes think about solutions such as BSU in Norway,
- Nina Lundström, member of the Swedish Parliament for the Liberal Party, who will outline her motion in Parliament and the general work ongoing politically round the question,
- Caroline Rathem, head of Savings at DNB in Norway, about experiences and results from a quarter of a century of tax favoured savings linked to residential property in Norway via the BSU (Boligsparing for ungdom) regime.
The forum will also see a panel discussion involving Linn Matic, Caroline Rathem and Emma Persson, personal finance economist at insurance group Länsförsäkringar, with the discussion moderated by Gustav Sjöholm, savings economist at Sifa.
InvestmentEurope asked Fredrik Nordström why the topic is important for investment fund providers in the Swedish market, in part because of how fiscal policy in different jurisdictions can effect competition between investment funds and property as ways to save.
“Our starting point is that it is very difficult for youth in Sweden to enter the residential property market,” he said.
“High prices, loan ceilings and amortisation requirements mean that it is children to parents with money who can buy their first home. For other young adults it is more difficult. It does not matter much what you earn because you are expected to a great extent to be able to contribute a significant deposit.”
“We see funds as an excellent form of savings for significant savings requirements and want to facilitate savings. Our idea is not that it is summer residences but the first home that is the objective for the savings. It is also possible to develop a preferred way of saving so that it does not just benefit those who already have capital but also stimulates savings across a broader group.”
“Buying a home is not just an investment, it is the object of the savings. It can become a good deal, but we all need a home regardless of how property prices progress.”
Housing policy is set to be one of the key battlegrounds in Sweden’s upcoming general election, taking place 9 September.
Recent polls have suggested that there is a chance for the Sweden Democrats party to become the biggest by share of the vote, which would significantly transform policy direction across many areas – a YouGov poll in mid-May put SD on the same level as the governing Social Democrats, at 23% each.
Each of these parties takes a very different approach. The Social Democrats want to increase the rate of construction of residential units. The Sweden Democrats want to restrict immigration as an initial step in ensuring access to units. Other parties likely to enter the next Parliament on the basis of receiving a minimum share of the vote, are also expected to influence housing policy ongoing. All must in turn deal with policy development at the Riksbank, Sweden’s central bank, which in recent years introduced a loan-to-value cap and amortisation requirements to dampen house price inflation amid concerns of levels of household debt.
Further access to information on developments in housing policy can be found on websites such as https://www.bostadspolitik.se/ (run by the Swedish division of Norway’s largest construction and civil engineering company Veidekke) and https://fastighetsnytt.se/ (one of Swedish publisher Bonnier’s titles).