Industry: Government Will Fail To Meet Migrant-Population Boom House-Building Targets

Population Boom
STOCKHOLM, July 3 (Reuters) – It is one of Swedish centre-left Prime Minister Stefan Lofven’s signature policies – building 700,000 homes in a decade to ease a shortage of dwellings that has business worried about attracting employees and policy makers fearing a property bubble. But Lofven’s plans may be pie in the sky, industry officials and analysts say. Decades of weak construction levels combined with a fast growing population has made new homes scarce. Over 80 percent of Sweden’s municipalities are suffering shortages, a 30 percent increase since last year, the National Board of Housing said. The shortage could be the Achilles heel of one of Europe’s fastest growing economies. It has contributed to house prices clocking up double digit annual growth, sparked fears of losing international business competitiveness and complicated central bank policy in an era of record low rates. For Lofven’s minority government, which faces an election in 2018, a failure to seriously dent the shortage may become a political handicap, given that housing construction was one of his main campaign promises. But strict regulations combined with lack of capacity in the construction sector mean Lofven’s plans will likely fall short, according to industry officials and analysts, while