Sweden's housing subsidy won't help shortage, say builders

Stockholm

SWEDEN's plan to subsidise housing construction will do little to solve the apartment squeeze in the major cities that has economists warning of a property bubble, according to the Swedish Construction Federation, which represents more than 3,100 companies.

The government plans to introduce investment support of 3.2 billion kronor (S$527 million) a year for construction of rental and student apartments. It targets 250,000 new homes to be built by 2020 and hopes its backing will be used as partial funding for 15,000 new rental flats a year.