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Fast Comment SwedenHousing prices in December

  1. Housing prices decreased by 2.5 percent y-o-y
  2. High supply, but sales activity has not dropped
  3. Soft landing for the housing market
Housing prices decreased by 2.5 percent y-o-y
According to Valueguard's HOX index, housing prices decreased by 2.5 percent in December compared with December 2016 (versus a 0.2 percent fall in November). Compared with November, prices fell by 2.0 percent. However, December is usually weaker than other months. When adjusted for normal seasonal variation, the percentage change was -1.1 percent, according to our calculations. Still, this was somewhat weaker than expected. All in all, apartments in Stockholm have seen the biggest declines, expressed in the negative annual percentage change of 9 percent.
High supply, but sales activity has not dropped
The stock of unsold housing units is high. The supply of housing has increased due to higher housing construction. Another contributing factor is the concern about the housing market. That said, the sales activity has not dropped, the number of transactions is actually somewhat higher than the year before.
Soft landing for the housing market
We continue to believe in a stabilisation of prices ahead, rather than a beginning of a price fall. The employment ratio is high, as is the household sentiment, and interest rate costs will continue to be low in 2018. Household saving is also at a high level. Going forward, we will pay close attention to the sales activity. Even though the stock of unsold housing units will be elevated for some time to come, we expect it to gradually come down.

 


Source: Valueguard and own calculations.

 




Source: Valueguard, Macrobond, seasonally adjusted by Handelsbanken.

 


Source: Valueguard, Macrobond



Source: Valueguard, Macrobond

 


Source: Hemnet, Macrobond

Disclaimer

Helena Bornevall

Senior Economist

Scenario Analysis

hebo12@handelsbanken.se

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