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Fast Comment SwedenSmooth sailing, housing prices remain stable

  1. Housing prices rose slightly in April and remain higher than a year ago
  2. Flats and houses are, to some extent, two different stories at the moment
  3. Threats and opportunities, with shaky global backdrop but lower interest rates
Housing prices rose slightly in April and remain higher than a year ago
The April Valueguard HOX data show prices rose slightly overall, +0.2 percent m-o-m, compared to March (+0.8 percent non seasonally adjusted). This means prices are now up 1.3 percent compared to a year ago, but still 4.1 percent lower than the peak before the price falls in the latter part of 2017. While the positive annual rate could tempt one to start talking about a mildly positive trend, we choose to keep the label of a stable housing price trend. Why?
Flats and houses are, to some extent, two different stories at the moment
To begin with, there are regional differences as well as differences between trends among flats and houses. Prices for houses in, for example, Malmö are well above the previous 2017 peak and rising further, while prices for flats in Gothenburg and Stockholm remain at lower levels and have made a more hesitant start to 2019.
Threats and opportunities, with shaky global backdrop but lower interest rates
Historically, negative global shocks have often dragged down Swedish housing prices via factors such as worsening financial conditions and negative household sentiment. At the moment, we do not see such effects clearly, despite the shaky global backdrop. Another threat to prices, however, is that prices for newly constructed homes are still decreasing, something that could sink prices in the overall market. On the other hand, we now forecast interest rates to stay lower for longer and, overall, we continue to expect stable housing prices for the next couple of years.


April the third month of consequtive growth after fall in January; prices higher  than a year ago


Source: Macrobond, Valueguard


Prices still low compared to peak, especially for flats where also the recent tendency is weak


Source: Macrobond, Valueguard


Continuing price decreases for new construction might be holding back prices for flats in overall housing market 





Disclaimer

Johan Löf

Senior Economist

Sweden

jolo22@handelsbanken.se

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