In recent years, Heimstaden has bought residential properties in Sweden and Europe at a high rate. The company is now Sweden's largest rental housing company and Europe's second largest. In Sweden, Heimstaden now has about 45,000 apartments. But the expansion that occurred when interest rates were low has come at a price. Heimstaden currently has around SEK 200 billion in debt.
In Malmö, after a recent record increase in rent by 5 percent, the company has demanded negotiations for another 2 percent rent increase, citing increased interest costs.
"People came in late to the party when they bought at inflated prices with high debt as a result. To now imagine that tenants will save the situation when all wage earners receive falling real wages is also not so well timed," says Stig Westerdahl, professor of business administration at Malmö University.
During the spring, the real estate sector that was recently considered red-hot has become a crisis sector. The latest company to see the share plummet is SBB.
"The most problematic industry in Sweden has been the real estate industry with extensive cross-ownership and high debt. Heimstaden is one of the companies that stands out as one of the most problematic, he says.
"It couldn't last forever"
Mikael Wikén lives in a two-room apartment of 50 square meters in one of Heimstaden's properties in Råcksta in Stockholm. The rent is 9800. He is worried about upcoming hikes.
"They have an obligation to their shareholders. At the same time, it is a strange way to act – to take these risks. We have had a low interest rate environment for a very long time. It couldn't last forever," he says.
SVT has sought Heimstaden's principal owner Ivar Tollefsen and CEO Helge Krogsböl for an interview about the company's risk-taking without results.
In an email, the company writes that "We have a solid financial and liquidity position and continue to deliver good results" but "with rising interest rates, it is reasonable that tenants also contribute to part of the cost increase".