Thursday, 13 November 2025
Sweden’s real estate market showed clear signs of recovery in the third quarter of 2025, supported by improving financing conditions, stronger investment flows and sustained occupier demand across key sectors. Total property transactions reached approximately SEK 33 billion during the quarter and SEK 104 billion for the first nine months of the year — about 27 percent higher than the same period in 2024.
Foreign investors were notably active, accounting for around a quarter of all investment volume, well above the historical average. Industrial and logistics properties led the market, followed by residential and office assets. Major deals included Alecta’s sale of its 50 percent stake in Ancore to ICA Fastigheter, Vasakronan’s purchase of Solna United from DWS, and Hines’ acquisition of an eight-asset logistics portfolio from Blackstone covering Stockholm and Gothenburg.
The Riksbank’s decision to lower the benchmark rate to 1.75 percent, after a series of cuts since mid-2024, has started to ease pressure on financing and stimulate renewed investor interest, particularly in sectors that had been constrained by higher borrowing costs. Analysts expect that the downward trend in interest rates will continue to stabilise valuations and gradually lift transaction volumes through 2026.
In the housing market, activity increased moderately as buyers and investors responded to improving credit conditions. Residential transaction volumes rose by roughly seven percent year-on-year, reaching SEK 9.9 billion in the third quarter, while the number of deals climbed by more than a quarter. Several high-profile transactions underscored renewed confidence in the sector, including Familjebostäder’s acquisition of 14 apartment buildings in Hjulsta and KKR’s forward funding of a new residential development in Täby.
Rental demand remains strong across Sweden’s largest cities, but construction has slowed significantly. The number of new apartment completions in 2025 is expected to fall by nearly half compared with two years earlier, limiting supply at a time of steady population growth and housing need. Although smaller municipalities have reported isolated cases of increased vacancy in new developments, the main metropolitan regions continue to experience structural undersupply.
The logistics and industrial segment remains one of the country’s most dynamic asset classes. Leasing activity accelerated in Q3 to nearly 240,000 sqm, driven by expansions from occupiers in e-commerce, manufacturing and pharmaceuticals. Notable transactions included major new leases by Hitachi, Epiroc, AstraZeneca and Salix Group. Despite a slight increase in vacancy due to a wave of new completions, demand for sustainable and strategically located warehouse space continues to outpace supply in most regions.
Investment in logistics assets accounted for around one-third of Sweden’s total property market turnover in the third quarter, almost doubling the level recorded a year earlier. Yields remained stable, reflecting ongoing competition for prime assets and a cautious but confident outlook among investors.
Across all property sectors, Sweden’s market is showing stronger fundamentals than at any point since the peak of the rate-hike cycle. Lower borrowing costs, rising international participation and a gradual return of development activity point toward a measured but broad-based recovery as the country heads into 2026.
