The price of forest land has fallen in almost all of Sweden with an average price drop of 5.1%, according to Ludvig & Co Fastighetsförmedling, a real estate broker of forest properties.
The troubled global situation with wars and conflicts and increased interest rates affects highly leveraged households, forest owners and companies. It is also the high interest rate that has had the greatest impact on the decline in the price of forest land. However, the interest and desire to invest in forests remains high among both large players and private individuals.
The price decline already began in the fall of 2022 in Southern Sweden, with lower activity on the property market and longer sales times. It was accentuated during 2023 and slowly spread first to central Sweden and after the summer also to northern Sweden, which for a long time resisted the higher market interest rates.
In 2023, the average price decline in Sweden is 5.1% in nominal terms. The average price drop is 6.9% in southern Sweden, 3.6% in central Sweden and 4.2% in northern Sweden.
The existing low-leveraged forest owner has had a nice profitability from his business, which is strongly linked to the high prices for wood raw material. This has created great opportunities to make additional purchases, while new founders had more difficulty entering the market.
“Although the price picture has gone down, it is important to emphasize that we are still closing at historically high levels if you look back 5-10 years. Forest property owners generally still get paid very well when selling forest,” says Peter Calderon, Business Area Manager at Ludvig & Co Fastighetsförmedling.
