Published on and written by Cyril Jarnias
Long perceived as a country of vast preserved spaces and human-scale cities, Sweden is now caught in a powerful dual movement: a structurally growing tourism industry, and a tight real estate market, undergoing a major reshuffle after a historic correction. Where these two dynamics meet, the effects are very tangible, whether it’s the price per square meter in the Stockholm archipelago, rents in Uppsala, or the number of second homes in the mountains of Jämtland.
The real estate market in Sweden, both urban and rural, is directly and indirectly impacted by several dynamics: visitor flows, the growth of short-term rentals, the boom in second homes, and the directions of public policy.
Tourism, now an economic… and real estate pillar
Tourism is a heavy weight in the Swedish economy. Before the pandemic, its direct contribution to GDP hovered around 2.6%, and all travel and tourism-related activities accounted for over 6% of gross domestic product by some estimates. After the sharp drop in 2020 (1.7% of GDP), the sector rebounded quickly: in 2021, tourist spending reached 249 billion Swedish kronor, an 18% increase from 2020, with 57 billion coming from foreign visitors.
The spending of foreign tourists in Sweden in 2024, exceeding the 2019 peak by over 16%.
For the real estate market, this means one clear thing: the demand for beds – whether hotel rooms, campsites, short-term rentals, or second homes – is increasing faster than traditional accommodation capacity, in a country where housing construction remains below estimated needs. Sweden needs to build about 52,000 homes per year over a decade to close the deficit, but only delivered around 31,000 per year in 2023–2024, with a drop in housing starts of 26% to 46% depending on the segment.
In Sweden, properties like a vacation home on the coast of Västra Götaland, an apartment rented on Airbnb in Södermalm (Stockholm), or a small cabin in Dalecarlia illustrate how tourist-use real estate integrates and influences the residential market, becoming strategic assets in a context of housing shortage.
Second homes: Sweden, the land of “voluntary temporary populations”
One of the Nordic specificities, and Sweden’s in particular, is the gigantic place occupied by second homes. Nearly half of the Nordic population has access to a second home, and in Sweden, this phenomenon is concentrated in a few emblematic regions: the southern mountains (Dalecarlia, Jämtland Härjedalen), the Stockholm archipelago, or the island of Öland.
The visitation figures are impressive: in the mid-2000s, second homes already accounted for about 34 million overnight stays, nearly a quarter of all tourist overnight stays in the country. In some areas, over 50% of small houses serve as vacation homes. About one-third of the second home stock is located in “fritidshusområden” (recreational house areas), these seasonal spaces with fewer than 50 permanent residents but at least 50 houses spaced less than 150 meters apart.
Permanent flows between city and countryside
Nordic research describes a continuous process of “counter-urbanization”: residents of large Swedish cities – Stockholm, Gothenburg, Malmö, Uppsala – spend an increasing share of their time in homes located in low-density regions, especially in summer and winter, but also increasingly on weekends. This movement creates what researchers call “voluntary temporary populations”: neither classic tourists nor permanent residents, but an in-between that blurs the statistical boundary between urban and rural.
The motivations are well documented: a need to reconnect with nature, escape the urban pace, strengthen family ties, but also an investment logic. In Finland, studies show that city dwellers use second homes significantly more than rural residents, confirming the “compensation theory”: spending time in sparsely populated, natural spaces improves perceived quality of life.
Finnish studies
On the ground, these flows have a concrete impact on rural real estate. In mountain municipalities like Härjedalen or Jokkmokk, the permanent population is decreasing, but seasonal residents and second homeowners partly compensate for this decline. They support businesses, services, cultural activities, and create jobs in tourism, crafts, construction, or resident services.
When a second home structures a local market
Nordic studies show that, overall, the community impact of these homes is considered positive by municipalities that have learned to integrate them into planning. In Härjedalen, Sweden, cabin owners and seasonal tourists are seen as assets for rural development. They participate in planning cultural activities, justify maintaining certain public or private services, and boost local employment.
To measure the impact of temporary residents and tourists, researchers use the “Community Impact” (CI) indicator. It corresponds to the ratio between the total number of annual occupants (permanent and temporary) and the permanent population alone. A high CI means this “invisible” population exerts increased pressure on infrastructure, services, and ultimately on the demand for housing and land. This indicator is particularly strong in rural and intermediate areas, where the number of second homes increased the most between 2010 and 2017.
For real estate, this means that the price of houses and land no longer depends only on official local demographics, but also – and sometimes primarily – on these seasonal flows.
Schematic overview of the place of second homes in some emblematic Swedish areas, based on Nordic research and market studies.
A highly sought-after area for second homes, characterized by high island concentration and seasonal accessibility.
A classic destination for cottages, offering a forest and lake natural setting ideal for recreation.
A popular rocky archipelago, especially for second homes of Gothenburg residents.
A southern region with a milder climate, attractive for second homes, with countryside and coastal landscapes.
An area of mountains and vast natural spaces, a destination for second homes often oriented towards winter activities and wilderness.
A Baltic Sea island destination, very attractive in summer for its second homes and unique heritage.
| Region / Type of territory | Role of Second Homes | Dominant Effect on the Real Estate Market |
|---|---|---|
| Stockholm Archipelago | Most attractive region for second homes | Sharp increase in values, pressure on local homeownership |
| Southern Mountains (Dalecarlia, Jämtland Härjedalen) | Significant stock of vacation cabins | Supports the market in areas with declining demographics |
| Öland and Southeast Coast | Historical seaside destination | Seasonal market, strong summer demand, rising prices |
| Small rural municipalities with a high proportion of fritidshusområden | Over 50% of houses used as second homes | Prices disconnected from local incomes, dependence on tourism |
In practice, the demand for second homes contributes to widening spatial inequalities. A vast analysis of single-family houses sold between 1999 and 2017 shows a growing gap between the values of second homes in highly attractive areas – coastline, mountains, archipelago – and those in less touristic inland regions. Tourism therefore doesn’t just create niche markets; it reshapes the very geography of real estate values.
Coastal and archipelago tourism: between a desire for tranquility and soaring prices
Sweden’s maritime coastline is immense: nearly 300,000 km² of coastal areas are mentioned, including archipelagos, Baltic and North Sea shores. These spaces concentrate a major share of tourism and a significant proportion of second homes. They are also at the heart of strong tensions between tourist attractiveness, environmental preservation, and housing access.
Stockholm Archipelago: a laboratory of tensions
The Stockholm archipelago is identified as the most attractive second-home region in the country. Islands like Blidö, Ingmarsö, or Sandö have been closely studied: the number of second homes there far exceeds that of year-round occupied homes, and land value has skyrocketed.
85% of visitors to the Luleå archipelago come primarily for peace and quiet.
The study on Luleå also reveals that visitors who own a second home or who return regularly develop a strong “place identity”: 61% of them declare a strong or very strong attachment to the archipelago. This attachment often translates into a willingness to invest more, renovate, expand, or buy a home closer to the waterfront, contributing to the scarcity of available properties and price tensions.
Marine tourism as an economic… and land-use driver
National figures confirm the weight of the coastline in tourism and, consequently, in real estate: in 2010, coastal and marine tourism generated a total turnover between 58.6 and 75.2 billion SEK, representing between 23% and 29% of Sweden’s entire tourism industry. A specific segment is dedicated to “vacation housing linked to marine recreation,” which notably includes seaside second homes.
Marstrand records nearly 60,000 commercial overnight stays per year, illustrating its tourist appeal.
Price data shows that coastal vacation homes appreciate faster than the national average. In Västra Götaland, seaside vacation homes saw their average price per square meter increase by about 3.9% in one year to reach around €2,650/m², with a price increase for houses of 5.7% compared to 3.3% nationally. This outperformance testifies to the premium attached to tourist location and water access.
For local households, the consequence is clear: homeownership becomes more difficult, and the pressure shifts to the already limited permanent rental stock.
Short-term rentals: the “touristification” of city centers
While second homes primarily structure rural and coastal markets, the rise of short-term rentals through platforms like Airbnb or Booking.com is disrupting urban markets. Sweden is not immune to this European trend, even if levels remain, for now, lower than in cities like Barcelona or Paris.
Stockholm, a testing ground for Airbnb effects
Stockholm is the main tourist destination in the country, with over 15 million commercial overnight stays in 2019, and around 9.7 million overnight stays in 2024, including 4.3 million international visitors. This tourist pressure is concentrated in a few neighborhoods: Gamla Stan, the medieval old town, Djurgården park, but also the gentrified neighborhoods of Södermalm and the upscale central districts.
Each entire-home Airbnb listing in Stockholm was associated on average with the disappearance of 0.15 year-round occupied apartments between 2012 and 2016.
In other words, the rise of short-term rentals creates a “rent gap”: the prospect of much higher income from renting to tourists incentivizes owners – individuals or investors – to withdraw housing from the traditional residential market. In a context where the average waiting time for a regulated rental apartment reaches nearly 9 to 9.4 years in Stockholm, with over 775,000 to 800,000 people in the queue, each apartment “converted” into tourist accommodation weighs on the shortage.
Rents, already high – a one-bedroom apartment in the city center easily rents for 12,000 to 15,000 SEK per month on the open market – are soaring in the most sought-after neighborhoods, while purchase prices flirt with 90,000 to 110,000 SEK/m² in Östermalm or Vasastan.
Uppsala and the indirect effects of “touristification”
While Uppsala is not primarily a tourist market, studies conducted on the renovation of large housing estates in Gränby and Kvarngärdet help understand how real estate valuation logics – sometimes stimulated by a city’s increased attractiveness – can generate a form of displacement. In these neighborhoods, renovation works starting in 2009 led to rent increases of 25% to 60%, forcing many low-income households to move to cheaper areas.
Improving the image and built environment, coupled with rising land values and rents, can lead to a phenomenon of gentrification and touristification. This process, similar to that observed in heavily frequented historic centers, has the consequence of pushing working-class residents and newcomers towards the peripheries.
A regulatory framework still being fine-tuned
The Swedish legal framework governing short-term rentals rests on several pillars: the Land Code (Jordabalken), whose chapter 12 – the Rental Law (Hyreslagen) – governs residential leases, municipal regulations, and the bylaws of housing cooperatives (bostadsrättsföreningar).
On a practical level, renting a home on Airbnb in Sweden involves respecting:
In Sweden, renting out your primary residence on Airbnb is subject to strict day limits depending on the city (90 in Stockholm, ~60 in Gothenburg, ~30 in Malmö) and requires registration or a permit. You absolutely must obtain written agreement from your landlord or housing cooperative. All income must be reported to the Swedish Tax Agency (Skatteverket): a tax-free allowance applies up to 40,000 SEK in annual income; beyond that, it is taxed (approx. 32% to 57%) after deducting expenses. Non-compliance can lead to lease termination.
In large cities, the situation becomes complex enough that a small ecosystem of specialized companies – like Swedbnb – has developed, offering full-service management of rentals (listing, cleaning, guest welcome, price optimization).
For real estate, these rules create a specific profitability framework. Where the nightly stay cap remains relatively generous and controls are limited, short-term rental remains significantly more lucrative than a long-term lease. In rural or small areas where constraints are minimal, it can even be a decisive income supplement to make a second home profitable.
The following table summarizes some parameters that structure the tourist profitability of a home compared to its classic residential use:
| Key Variable | Effect on Urban Real Estate Market | Effect on Rural / Coastal Real Estate Market |
|---|---|---|
| Nightly stay cap (Airbnb) | Limits the massive shift of stock into tourism, but maintains a strong incentive in sought-after neighborhoods | Often not very restrictive, favors profitability of cabins and vacation homes |
| Level of regulated rents | Creates a significant gap with tourist rates, incentivizing illegal subletting or conversion into tourist furnished rentals | Lesser impact, the reference is rather the price of the second home |
| High price per m² | Makes tourist rental almost indispensable to make certain purchases profitable | Stimulates investment by foreigners and city dwellers in tourist areas |
| Control and enforcement | Where the city invests in control, “touristification” slows | In poorly controlled areas, tourist uses develop with little friction |
Domestic tourism, pandemic, and geographic rebalancing
An important turning point occurred with the COVID-19 pandemic. Unlike many other countries, Sweden did not impose as strict mobility restrictions, but international tourism collapsed due to global constraints: foreign overnight stays dropped 70% in 2020, representing only 5.2 million overnight stays. In contrast, domestic tourism was much more resilient, with 38.1 million overnight stays in 2020 (–24%) then 46.9 million in 2021, only 5.8% below the 2019 level.
In 2021, 86% of tourist overnight stays in Sweden were by Swedish residents, illustrating the strong “staycation” trend.
A boon for rural hotels… and private rentals
This preference for domestic destinations strongly supported the hotel market in rural areas. In 2024, demand for hotel rooms in these regions is about 10% above the 2019 level, while major cities see only stabilization, penalized by the lasting decline in business travel (–9% compared to 2019). Mountain, seaside, or nature hotels benefit from a steady flow of leisure travelers, especially in winter and summer.
The hotel sector faces intensifying competition due to the rise of new forms of accommodation like cabin villages, chalets for rent, vacation rentals, and platforms such as Airbnb. In some mountain or nature destinations, the supply of private rentals has increased so much that it now directly competes with traditional hotels.
In this context, the profitability of rural properties intended for seasonal rental has become a major argument for investors. Uppsala, Malmö, Gothenburg, or Stockholm offer gross rental yields around 4% to 7%, but some small university towns or rural areas reach 7% to 8% on well-located apartments, without even counting seasonal premiums linked to tourist stays.
Foreign investors and vacation homes: the exchange rate effect
Sweden is one of the European countries most open to foreign investors in real estate: no specific restrictions hinder purchase by non-residents, and procedures are relatively simple. For the vacation home segment, this openness, combined with prices deemed attractive compared to other European markets, explains sustained interest for several years.
Who buys vacation homes in Sweden?
In 2024, foreigners owned nearly 38,000 vacation homes, representing about 6% of the country’s total second-home stock. While the growth of this stock has somewhat slowed – a slight decrease of 0.5% in 2024 after near-stagnation previously – the geographic structure is very marked:
Distribution by county of the percentage of second homes owned by foreign owners.
Over one-third (36.5%) of second homes belong to foreigners.
Shows about 23.1% foreign ownership.
Jönköping, Blekinge, Västra Götaland, and Kalmar range between 9% and 13%.
The dominant nationalities are Norwegian (32.1%), German (29.8%), and Danish (25.3%). The typical profile: a European household looking for a house in nature, near a lake, the sea, or a ski resort, in a region where prices remain well below those of their domestic market.
The role of the Swedish krona
The exchange rate played a crucial role. Between January 2022 and September 2023, the Swedish krona lost about 12.5% of its value against the euro, making Swedish real estate assets mechanically cheaper for eurozone buyers. In recent years, the combination of a real estate price correction (–10.8% between early 2022 and late 2023, with a drop nearing 16% from the peak) and a weakened currency created an opportunity “window.”
The average price of a vacation home in Sweden is about 28% lower than that of similar properties in other countries.
For local markets, this foreign demand has two faces. On one side, it revitalizes rural or declining markets, brings capital to renovate an aging housing stock, supports businesses and services. On the other, it contributes to disconnecting prices from local income levels and reinforces the speculative dimension of tourist real estate.
A simple table illustrates these geographic contrasts:
| Indicator (2024) | Kronoberg | Värmland | Jönköping | Blekinge | Västra Götaland | Kalmar |
|---|---|---|---|---|---|---|
| Share of second homes owned by foreigners | 36.5% | 23.1% | 13.1% | 10.8% | 9.8% | 9.5% |
| Dominant profile of foreign buyers | Germans, Dutch | Norwegians, Germans | Germans | Danes, Germans | Norwegians, Danes | Germans, Danes |
These figures show that “real estate tourism” is not homogeneous: it concentrates in certain territories, often those where the value-for-money for a foreigner is maximal and where the natural environment offers high tourist potential.
Tight housing market: when tourism and shortage overlap
To understand the impact of tourism on Swedish real estate, one must also look at the general background: a housing market plagued by a recurrent crisis. After a long upward phase (nearly +90% in nominal terms between 2012 and 2021, and +260% over two decades), Sweden experienced its worst correction since 1993, with seven consecutive quarters of falling prices and an overall decline of nearly 16% since the 2022 peak.
Since 2024, the market has stabilized and timidly restarted: +2.86% year-on-year in the first quarter of 2025 for the national price index, with more marked progression in some northern regions (up to +12.17% in Central Norrland). The major metropolises – Stockholm, Gothenburg, Malmö – see a more moderate recovery but remain the most expensive markets.
This is the number of housing starts in 2021, a historic peak since 1990.
In this context of chronic under-supply, every home diverted from the permanent residential market – because it becomes a rarely occupied second home, a property entirely dedicated to short-term rental, or a vehicle for tourist speculation – weighs heavier than in a balanced market.
Cumulative effects in areas under strong tourist pressure
If one superimposes the maps of housing shortage and those of tourist intensity, several critical hotspots appear:
An overview of the main markets and their specific characteristics, influenced by tourism, demographics, and geography.
The country’s most expensive and tightest market, with a high concentration of short-term rental listings in central neighborhoods and a massive rental queue.
Second tourist hub with over 5 million annual overnight stays and a strong-growing economy, but some neighborhoods remain marked by precariousness and need for renovation.
Sustained demographic growth and rising prices, reinforced by the connection via the Öresund Bridge and Danish interest in buying in Sweden.
Economy dependent on ski and nature tourism, with a significant share of second homes and villages sometimes emptied in the off-season.
Everywhere, the same question arises: how to reconcile tourist attractiveness – which creates jobs, tax revenue, supports businesses – and the right to housing for permanent residents?
Tensions manifest in several ways: increased property taxes for residents who see their home value rise as a consequence, difficulties for young households to buy or rent, a feeling of “museum-ification” in some historic centers where daily commerce disappears in favor of tourist shops, local conflicts around tourist facility expansion projects, as with Gröna Lund in Stockholm.
Public policies: tourism as a rural development tool… but limited priority in budgets
Political discourse, in Sweden as elsewhere in Europe, regularly presents tourism as a lever for development in rural and sparsely populated areas. The argument is simple: the demand for rural amenities (landscapes, nature, culture) would allow for economic diversification, the creation of a “new rural economy” oriented towards services, and slowing urban exodus.
A study (2000-2013) reveals that, despite enthusiastic strategic discourse, rural tourism only benefited from a modest share of the budgets of Swedish rural development programs and regional structural funds.
In the 2007–2013 rural development program, the axis encompassing tourism represented only about 10% of the total budget, compared to 16% for agriculture and forestry and 64% for the environment. Of the regional structural funds, tourism absorbed only about 6% of support, far behind research, innovation, and transport investments.
In practice, tourism funding primarily targeted:
Main areas supported by financial aid, based on the facts provided.
Nearly 60% of aid is allocated to this sector, primarily targeting small structures like vacation rentals, cabins, and bed & breakfasts.
Aid supports activities related to hunting, fishing, outdoor activities, as well as the development of food tourism.
Support for marketing projects and networking of various tourism sector actors.
The municipality of Kiruna, in the far north, is the typical example of a rural territory betting on diversified tourism – northern lights viewing, stays in ice hotels, hiking, cultural activities – to support its local real estate market despite a difficult economic environment (decline in primary employment, seasonality, isolation).
These structuring investments have real estate repercussions: they justify, in the long term, the construction of new accommodations, the renovation of old houses, and help anchor young families in these territories. But their budgetary weight remains limited, meaning the most powerful movement remains that of the private market, fueled by the demand from urbanites and foreigners.
Towards tighter regulation of short-term rentals?
European debates on regulating short-term rentals, and the adoption of Regulation (EU) 2024/1028 on data sharing between platforms and public authorities, will have direct repercussions in Sweden from 2026. This text obliges large platforms to transmit standardized data (number of overnight stays, host identities, property locations) to national or local authorities, offering a much more precise control instrument.
For Swedish cities, until now faced with a lack of reliable data on the real volumes of tourist rentals, this is potentially a paradigm shift. It will allow for:
– Mapping areas of intense “touristification” more precisely.
– Verifying compliance with nightly stay caps and registration obligations.
– More easily differentiating occasional hosts from those operating in a quasi-professional manner.
In cities like Stockholm, where about 28% of Airbnb hosts already own more than one listing and where a few operators manage dozens of homes, this distinction between occasional use and commercial activity will be central to calibrating regulation that limits the effects of housing stock withdrawal without penalizing households that occasionally supplement their income.
What scenarios for the future?
In the medium term, projections suggest an annual growth of Swedish real estate prices on the order of 2% to 5%, with a more marked recovery expected around 2026 (up to +6–7%). Tourism itself is expected to continue its moderate upward trajectory: the number of tourist arrivals is set to increase from 8.3 to about 9.4 million by 2028, and the accommodation turnover will reach around 6.9 billion euros by that deadline.
Several structuring trends will determine the scale of tourism’s impact on the real estate market:
Several trends and regulations impact the sector. Pressure on housing persists in major and university cities. Demand remains strong for second homes and rural rentals, driven by ‘staycation’ and nature. A tightening regulatory framework for short-term rentals could reduce the appeal of purely investment rentals. Finally, an easing of credit policies, without an increase in construction, could intensify tensions in the most sought-after tourist areas.
For investors, municipalities, and residents, the challenge is now to think of real estate no longer as a compartmentalized market – housing on one side, tourism on the other – but as a single system, where each cabin, each downtown apartment, each seaside house can shift from one use to another depending on the seasons, interest rates, exchange rates, or regulations.
Sweden is testing a model combining attachment to territory, desire for nature, strong tenant protection, foreign capital, and experiential tourism. Its success in articulating these dimensions will determine the future of its market and the place of permanent residents vis-à-vis the voluntary temporary populations.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
