Expert: Bostadsbyggarna need to change the business model

the Developer SSM was last week sued by 44 home buyers who wish to terminate their contracts to housing which is under the building at Telefonplan in southern Stockholm. Previously, five other supposed buyers sued the company.

the DN was already in the summer tell us about stämningshoten against SSM and the building at Telefonplan. The builder has delayed access for the buyers for over a year, compared with when they signed up for the purchases.

the Mood (which formally is directed toward the association as controlled by the SSM) is the latest in a line of disputes that shakes the residential builder, particularly in Stockholm.

that developers have a business model that no longer works.

– the business idea requires a stable upward market to work, " says Peter Malmqvist.

Photo: FANNI OLIN DAHL / TT

He has been interested in the housing market and he believes that the so-called bostadsutvecklarna balls over most of the risk on the buyers.

– It is a very big risk an individual takes when it signs a firm contract that says that within two-three years should the person pay out a large sum of money, " says Malmqvist.

Furthermore, it occurs at an early stage. Already before the building will in time want to the developer that the contract is written. A first total, maybe 25.000 sek paid by bostadsköparen. Thereafter, the at least one payment is to be made, in accordance with the schedule builder feature.

And two years later, shortly before the occupation, the purchaser shall pay the rest, that is to say several million. But the buyer do not know when the contract is signed what the existing home is worth or the new one.

– It is this solid commitment that the buyer makes that not work at all in an uncertain market, " says Malmqvist.

And the market has become uncertain in the highest degree. Since their peak in late summer 2017, housing prices have on average fallen by 10 per cent in Stockholm, where the crisis of bostadsutvecklarna is that it is useless.

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. Bostadsköparen have signed up for a dwelling for six million. But when the home is completed, the value is only 5.5 million.

– And in addition: the residence that I need to sell 4.5 million to cope with this, I get only 3.7 million.

I lie back on the contract I have bought, I lie back on my inbytesvärde and I can not deliver on this commitment.

Read also: how to avoid disputes in the bostadsköpet

Even in good times there are always buyers who can not cope with their commitment for one reason or another. But the developer, who absolutely do not want to advertise that to have driven the unfortunate buyers to personal bankruptcy, is to solve them from the contract for a smaller amount.

The dwelling will then become a ”repossessed condominium”. However, it is not a problem for the developer as long as prices are rising. It becomes easy to sell to another speculator.

– But when you have a declining market and you may get 20 percent withdrawn in the knee, then it is only the strong who can come up with that kind of offer, " says Malmqvist.

" Now fear the builders wildfire - where every person thinks they have torskat 10-15 per cent on his contract, wants to be delivered from it. And this is irrespective of whether they can pay or not.

It may not be the builders to go with, and therefore they put hard against hard - with disputes similar to the SSM-the dispute as a result.

Peter Malmqvist has gone through the number of sold, but not yet built condominiums, in Sweden during the period January-september last year, and compared with the corresponding period a year earlier.

the Number has plummeted by between 40% and 70%.

"It has been raging most of the builders who are especially focused on Stockholm," he says.

customers discounts in one form or another. Bonava for example, last summer a ”sommarlovsrea” on the fours in the South of the Harbor where the price was reduced by 15 per cent.

Peter Malmqvist do not believe in the flower beds.

– The main risk I take when I sign the contract, is not knowing what I get for the current dwelling. It can crack me up I can't get out what I need for it.

"the Only risk is making people stay away," he says.

the business model must be changed so that the risk is redistributed between buyers, developer and banks, says Malmqvist. And then the time factor is crucial.

– You need to reduce this kontraktsbindningstiden from 2.5 years to a more reasonable time, say 5-6 months, before moving in, he says.

last year, took some of the market's largest players, including Skanska, the initiative for a mark of quality, Secure housing association, which will strengthen consumer protection for buyers of newly-built condominiums.

Magnus Lambertsson, sales manager at Skanska, was one of the initiators. He says that there has already been a big shift in the market when it comes to förhandskontrakten.

"a few years ago you could get 70-80% contracts concluded in advance signed before the start of construction," he says

– it is not today. Now it is perhaps 20 to 30 per cent.

as a Consequence, it is only the scale housing developer with a strong financial muscles that can pass the building without knowing in advance how many apartments which can be sold when construction is completed.

– It can certainly be done. And it can also be more collaborations and perhaps that you take in a financier at an earlier stage, " says Lambertsson.

, who do not want to be quoted, exclude the not a wave of bankruptcies.

But Peter Malmqvist believes that the builders that are publicly listed instead will be forced into new share issues and that the banks will write down the loans to the more vulnerable to the builders. It will in turn lead to changes in ownership.

" So creditors end part and the old shareholders, who can't or don't want to be involved in the issue.

Peter Malmqvist warn-scale housing developer that's taken major risks with the spectacular builds. Several of the companies ' share prices have already plummeted.

– You have already lost 85 to 90 per cent from the toppläget, concludes Malmqvist.

SSM writes on its website that the agreements are valid and that there are no grounds for lifting them.