Yeh. It's a bit of a mess at the moment but it's also a necessary exorcism, I think, no matter what the outcome is.
Swedish politics are based on coalition. Basically, the Social Democrats had to form a block with - among others - the Left Party and the Centre Party after the last election in order to have enough votes to form a government. And the agreement in order to get the latter on board was quite pricey. Unofficially they agreed to push through the Centre's proposal about market rents (i.e. removing the regulation of the market like you said and letting the landlords set the prices), which the Left Party had warned was a line in the sand for them. So when the Social Democrats decided to push through market rents anyway this month the Left demanded a vote of no confidence, which of course the Sweden Democrats (the right-wing extremist party) were quick to back, which has drawn criticism.
The leftists are doing the right thing here at any rate and can't be criticised for doing what they have promised their voters. You can't keep compromising like this with basic social structures and the Social Democrats really should have known better, but then again they have always been selling out the working class in this country.
The real kicker of course is that the voters of the Centre Party don't really want market rents either. Only 26% of them approved of the idea in a recent polling. It's an issue that is being pushed entirely by lobbying interests.
This is yet another example of a European country refusing to deal with the failures of neoliberalism sooner. Swedish politics have been in a stalemate for a long time and something had to change. It will be better to give people a chance to deal with the fallout now, I think. Maybe it'll shake a few voters up. I'm not convinced a snap election would be a bad thing either if it comes down to it. There's a good chance that neither the Liberal Party nor the Christian Democrats would make the 4 percent threshold needed to get any seats in the Riksdag (the legislature and decision-making body) which would decimate the right-wing coalition.