[LINK] "Swedish Housing Market in `Exceptional Situation,' Minister Says"

[rfmcdonald]

Bloomberg's Amanda Billner reports on an unexpected housing boom in Sweden, driven by the immigration of refugees.

Sweden’s property market -- already heating up at an alarming pace amid negative central bank rates and a lack of supply -- now faces another challenge.

The country’s top minister for housing is warning that a record influx of asylum seekers will send the property market into uncharted territory as Sweden runs out of dwellings.

“We have an exceptional situation in the housing market and it’s exceptional because we’ve had an enormous lack of housing for a long time,” Mehmet Kaplan said in an interview in Stockholm on Thursday. “It doesn’t get easier to solve when the population increases further.”

Sweden on Thursday tripled its estimate for the number of asylum seekers from Syria, Iraq and Afghanistan set to cross its borders, and said the cost of looking after them next year will be twice that originally budgeted. As many as 360,000 people will arrive in the Scandinavian nation through 2016, the Swedish migration agency estimates.

The question is where to put them. Warnings of the risks building in Sweden’s housing market have grown more frequent this month, with a number of bank executives sounding the alarm and the central bank revealing plans to cut its exposure to mortgage debt. The chief executive officer of Sweden’s state mortgage lender, SBAB, said developments in the housing market are now “highly distressing” as prices continue to rise at a pace he warns is unsustainable.