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Fast Comment SwedenPreview: Housing prices in December, stable but slightly negative?

  1. We have seen a gradual stabilisation of housing prices in 2018
  2. Figures from Svensk Mäklarstatistik indicate a slight decline
  3. We stick to our analysis of stable prices this year, see further details in our macro comment
We have seen a gradual stabilisation of housing prices in 2018
On Friday, the HOX housing price index figure for December is due to be released. Since the implementation of the stricter amortisation requirement in March 2018, we have seen a stable, slightly positive, trend in overall housing prices. The annual percentage change (y-o-y) increased to the positive figure of 0.8 percent in November, meaning that overall prices were about 4 percent below the peak in prices at the end of summer 2017. Note that the HOX index is quality-adjusted, created out of data from Svensk Mäklarstatistik, and does not include new construction. We expect the monthly figure to be negative in December, as is usual for this month of the year. Nevertheless, we expect the stable trend to continue, even though we might see a small decline also in the seasonally-adjusted monthly figure.
Figures from Svensk Mäklarstatistik indicate a slight decline
Earlier this morning, figures from Svensk Mäklarstatistik were released. According to these figures, prices decreased by 1 percent, as a moving average, for houses and apartments. This indicates that the seasonally-adjusted monthly figures were slightly negative in December, but nothing to be worried about in our view. As in previous months, activity remained high and was revised upward in the previous month. Hence, this supports the view of continued stabilisation. Furthermore, Booli data suggest that average advertising times have remained stable.
We stick to our analysis of stable prices this year, see further details in our macro comment
There are remaining uncertainties of course, not least related to new construction and the uncertain development in the global economy. Consumer confidence has dropped to slightly below the historic average in recent months, yet the personal risk of unemployment is considered to be very low. We expect incomes and employment to continue to rise this year and counterbalance the effect from higher supply; the number of completions in new construction is expected to peak this year. Hence, we continue to expect a stable trend and we hold on to the views presented in our macro comment: As safe as houses? (http://research.handelsbanken.se/Macro-Research/All-Publications/publication/27731/macro-comment-sweden).

Please see graphs and comments below.


Only one month with a negative seasonally-adjusted figure since March, will we see another one in December? The annual percentage change (y-o-y) turned positive in November, and will likely remain so.


Source: Valueguard,  Macrobond


Activity is still high, even though the number of apartments sold is sligthly lower than a year ago.


Source: Svensk Mäklarstatistik, Macrobond


The number of homes for sale on Hemnet is close to last year's high level and continue to have a dampening effect on housing prices.


Source: Hemnet, Macrobond

Disclaimer

Helena Bornevall

Senior Economist

Scenario Analysis

hebo12@handelsbanken.se

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