Sweden | The bank’s review: More than half of Swedish households estimate that housing prices will continue to fall

Swedish the housing price outlook has remained gloomy in November, estimates the Swedish bank SEB.

The housing price indicator published by the bank on Monday rose to -33 points from -35 points in November.

The indicator rose for the third month in a row, but still remained at a record low. The indicator is at a level that points to the continuation of the decline in housing prices, SEB’s economist Daniel Bergvall write in his review.

About 55 percent of households expect house prices to fall and 22 percent to rise. In October, the corresponding figures were 58 percent and 23 percent.

“Households’ view of housing prices is not surprising. Rapid inflation, higher energy costs and rising mortgage interest rates are weakening the economy, which is causing downward pressure on housing prices,” the bank’s review assesses.

Read more: The Swedish real estate market is in a downward spiral, will the problems spread to Finland?

Apartments prices in Sweden have clearly fallen this year. According to the analysis company Valueguard’s housing market index, apartments have become cheaper by 7.3 percent in twelve months by September, and about ten percent from the peak of the current year.

In Sweden, housing prices rose sharply during the corona pandemic, when households changed to housing suitable for remote work. A similar development also took place in the housing markets of other countries, such as in Finland.

News agency Bloomberg by Nordea bank has lowered its forecast for the price development of Swedish apartments to an even darker one.

The bank now predicts that house prices will drop by 20 percent, while the previous forecast expected a 15 percent drop.

According to Nordea, such a steep price drop is likely to cause problems elsewhere in the economy. The bank expects that households will tighten their purse strings and household consumption will drop significantly next year.