Prices of Swedish forest land in 2008 increased by 6%

Feb 06, 2009. /Lesprom.com/. Despite the global financial crisis prices of Swedish forest land are still increasing. Average prices in 2008 have increased from 343 SEK ($41) to 364 SEK ($44) per cubic metre. This is an increase of 6% in comparison with the whole year 2007, Lesprom Network said according to the article on The Nordic Forest Owners Association. Forests have maintained their value despite the ongoing financial crisis. Forests are considered to be secure and stable investment objects. Investors have sold listed shares and invested in forests in stead. One reason for the price increases is the high demand exceeding the supply of forest land. The leading broker of the LRF Konsult Mr Carl-Johan Jürss says that in the 21st century there are also some new parameters, which impact and increase forest land prices. The number of first time buyers is on the increase. This category attaches great importance to soft values, which pushes prices upwards. Owning forest is trendy and a sign of quality of life. Hunting, fishing and walking in one's own forest are important values. Interest in forest investment is particularly strong among people born in the 1940s and 1950s. This generation is numerous and has money to spend. They are also less heavily in debt than younger generations. Average forest prices have increased by 84% since 2003. A recent poll among 100 brokers of LRF Konsult indicates that most of them have observed increased demand in 2008. Nevertheless, most of them expect prices to diminish somewhat in 2009. In the second half of 2008 there was a minor price reduction of 1.6% in comparison with the years’ first half. The main reasons for this were temporarily more restricted bank lending and generally lower prices of timber and pulpwood. However, prices have increased in comparison with the same period in 2007.