Buying off-plan in Sweden? A price drop can add SEK 270,000 upfront
If the flat's value falls from SEK 3.2 million to SEK 2.9 million before moving day, your down payment grows from SEK 320,000 to SEK 590,000.
You sign up for a newly built two-room flat with a purchase payment ("insats") of SEK 3,200,000. Moving day is 18 months away. Prices, interest rates and fees can change in that time, but the contract binds you. This is the path from the first signature to the keys, with five risks to weigh.
From preliminary contract to moving in
- Preliminary contract ("förhandsavtal"). The housing association promises to grant you the flat, and you promise to buy it. The association must first give you a written offer and at least seven days to think. It must also describe its finances and your personal financial risks.
- Cost estimate. The expected fees must rest on a cost estimate checked by two certified reviewers. The board must show it to you before you sign.
- Advance payment. The association may only take an advance if the Swedish Companies Registration Office ("Bolagsverket") has given permission. The association must then have put up security for repaying it. The advance may not exceed the purchase payment.
- Final contract and moving in. Once the association's economic plan is registered, you sign the final contract ("upplåtelseavtal"). You pay the purchase payment and move in.
The contract must state when the flat is expected to be granted. That window may not be longer than three months.
Risk 1: prices fall before you move in
A fall in prices does not give you the right to leave the contract. The bank will then lend at most 90% of the flat's market value. Say the flat is only worth SEK 2,900,000 when the time comes. You can then borrow at most SEK 2,610,000.
Your down payment becomes SEK 590,000 instead of SEK 320,000. That is SEK 270,000 more. If you walk away anyway, the association can claim compensation from you.
Risk 2: the fee ends up higher than estimated
If the fees are substantially higher than in the preliminary contract, you may withdraw. You must give notice within three months of finding out. You then have the right to get your advance back with interest. A small increase is not enough.
Risk 3: the build is delayed
If the flat is not granted within a reasonable time after the expected date, you may also withdraw. That applies if the delay is not your fault. A shorter delay can still cause trouble, for example if you have already sold your current home.
Risk 4: your rate and your pre-approval
A mortgage pre-approval ("lånelöfte") lasts a few months, not a year and a half. So you do not know what rate you will get on moving day. On a loan of SEK 2,880,000, a rate one percentage point higher costs SEK 28,800 more a year before tax relief.
There is one relief for new builds. The bank may give you up to five years without amortization if you are the first buyer of the home.
Risk 5: the association's finances and the developer
Your contract is with the housing association, not with the developer. In the early years, people from the developer often sit on the board. The association must therefore explain how much influence the developer has.
It must also say whether the association can claim money from the developer for delays or defects.
Read the cost estimate closely. Look at the association's debt per square metre and what happens to the fee if rates rise. The property types chapter of our real estate crash course explains how a co-op flat differs from other types of home.
Before you sign
- Work out your down payment if the price drops 10%.
- Work out your monthly cost with a rate one point higher.
- Ask what happens to flats that remain unsold.
- Keep the offer, the information and the cost estimate. You will need them if something goes wrong.
Sources
- Housing Cooperatives Act (1991:614), riksdagen.se
- Act (2026:226) on limiting mortgage credit, riksdagen.se
- Government bill 2021/22:171, regeringen.se
This content is general information, not financial or legal advice. Bolån Radar collects data from banks and authorities and cannot guarantee that it is complete or free of errors. Talk to your bank or an adviser before you decide.