Forcing construction costs down with prefab housing

Press release

There are opportunities for improving competitive tendering when public housing companies procure the construction of new housing projects. This is one of the findings of a new report from the Swedish Competition Authority.

The public housing companies, which are municipally owned, account for approximately 20 percent of apartments in newly-built multi-dwelling blocks. This makes them major players in the housing market. Today almost half of Sweden's municipalities suffer from a shortage of housing.

The Swedish Competition Authority has studied and mapped out the procurements of public companies in its report “Allmännyttans upphandling av bostadsbyggande” (“Public procurements of housing construction”). The report also includes a number of proposals that could lead to competitive process being improved.

If more public housing companies procured turnkey prefabricated housing such as the Swedish Association of Public Housing Companies' (SABO) ready-to-occupy apartment blocks, Kombohus, competitive tendering could be improved and construction costs reduced. In the long-term this could also open up possibilities for more international construction companies to enter the Swedish market.

“With better coordination among the various public housing companies and more procurements of turnkey prefabricated housing, competition could be strengthened and constriction costs reduced. Improved competitive tendering  and reduced construction costs are crucial for allowing municipal housing construction to increase," says the Swedish Competition Authority's Director-General Kristina Geiger in a statement.

According to the report, the shortage of buildable land, a planning and construction process burdened with long processing times and high construction costs are the three main obstacles that prevent an increase in construction by public housing companies.

“As landowners and by virtue of their monopoly on planning, municipalities have a key role to play in increasing the construction rate,” says Kristina Geiger.

The report shows that three Swedish construction companies dominate housing construction in the country. Many procurers complain about the difficulties in getting in bids from small- and medium-sized enterprises.

For further information, please contact:
Jimmy Dominius, Press Officer, phone +46(0)8-700 15 80 or +46(0)76-542 15 80
John Söderström, project manager, phone +46(0)8-700 16 60

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