Sweden faces housing crunch despite government building plan

Stockholm

IT is one of Swedish centre-left Prime Minister Stefan Lofven's signature policies - building 700,000 homes in a decade to ease a shortage of dwellings that has businesses worried about attracting employees and policy makers fearing a property bubble.

But Mr Lofven's plans may be pie in the sky, industry officials and analysts say.

Decades of weak construction levels combined with a fast growing population has made new homes scarce. Over 80 per cent of Sweden's municipalities are suffering shortages, a 30 per cent increase since last year, said the National Board of Housing.

The shortage could be the Achilles heel of one of Europe's fastest growing economies. It has contributed to house prices clocking up double digit annual growth, sparked fears of …