Roine Vestman on the housing boom: Timing has been crucial
Over the past few decades, housing wealth in Sweden has more than quadrupled. The sharp increase is primarily due to a prolonged decline in real interest rates and the financial crisis of the 1990s, says Roine Vestman, Professor of Economics at Stockholm University, in the financial news outlet EFN.
Roine Vestman, Professor of Economics at Stockholm University.
A growing gerontocracy
The EFN article draws on a book by researcher Samuel Moyn, who describes a growing gerontocracy in the United States – a society in which the older generation increasingly dominates both capital and political power. Similar trends can be seen across the Western world, although they are less pronounced in the Nordic countries.
In Sweden, the housing wealth tied up in detached houses quadrupled between 2001 and 2021, rising from SEK 1,800 billion to SEK 8,000 billion. In EFN, Roine Vestman says that timing has been crucial in determining who has benefited from this development.
“If you happened to be at the age of starting a family when interest rates began to fall, you could buy a large home at a low price and then see its value increase substantially. This is mainly due to low initial prices following the financial crisis of the 1990s, followed by falling real interest rates.”
Housing wealth among the 1940s generation
Nils Landén Mammos earned his PhD in Economics at Stockholm University last year. In a working paper, he has studied housing wealth among people born in the 1940s.
The research shows that parents who own a detached house are now more likely than in the past to take out loans against their property to help their children buy their first home. The children can then make larger down payments and buy more expensive apartments. As a result, they end up with more debt than those who have not received financial help from their parents, but over time their net wealth grows more rapidly.
The housing wealth of the 1940s generation alone is estimated at SEK 2,000 billion, EFN reports. According to Roine Vestman, inheritances have now begun to represent substantial sums even among the middle class.
“In the past, inheritance was something of a luxury reserved for the upper classes. But with the way house prices have developed, the sums involved have become considerable,” he points out in EFN.
Last updated: 2026-11-02
Source: Department of Economics