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Fast Comment SwedenPreview: House prices in March (Monday)

  1. First month after the implementation of the stricter amortisation requirements
  2. We expect a fall in house prices in March, but continue to expect a soft landing
  3. New construction continues to add supply to the market
First month after the implementation of the stricter amortisation requirements
On Monday, HOX's house price index for March will be published. It is usually a month with relatively high sales activity with the monthly change in house prices adjusted for normal seasonal variation only slightly below the actual value. Significantly more important to follow this year, in order to try to determine the underlying trend, are effects related to the newly-implemented stricter amortisation requirements. During the first two months of this year, both the number of housing units for sale and the number of sales were high. Moreover, house prices, according to the quality-adjusted HOX index, did not go hand in hand with the Svensk Mäklarstatistik house price index, which may indicate composition effects and a change in buying and selling behaviour.
We expect a fall in house prices in March, but continue to expect a soft landing
Since the peak last summer, house prices have fallen by about six percent, according to the HOX index. At the same time, the number of homes for sale has increased, both in terms of newly-produced and existing housing units. Even though the ratio of housing units that are sold to those for sale has decreased, the number of transactions has been high, and has gradually increased. So far, we have seen the biggest fall in house prices in Stockholm, both for tenant-owned apartments and houses. According to the Swedish Financial Supervisory Authority's estimates, approximately one third of new homeowners in Stockholm are affected by the stricter amortisation requirements, compared with approximately 20 and 10 percent, respectively, in Gothenburg and Malmö.
New construction continues to add supply to the market
In March, the number of apartments for sale on Hemnet dropped sharply (see graph below). Booli statistics indicate, however, that this does not apply when taking into account new construction. Therefore, new construction continues to add supply to the market. The turnover, according to this data, is in line with that in February. According to weekly data from Booli Pro, there was a clear drop in house prices in March. Potential temporary changes in buying and selling behaviour, however, make the already tricky comparison with the HOX index even more difficult. Small apartments appear to have seen greater price falls than medium-sized apartments in March, but it is the latter that account for a larger proportion of transactions and a large part of the increase in apartments for sale in previous months. Finally, we continue to expect a soft landing for the housing market, reiterating our emphasis on the strong economic conditions.


 


Source: Hemnet, Macrobond

 


Source: Valueguard, Macrobond







Disclaimer

Helena Bornevall

Senior Economist

Scenario Analysis

hebo12@handelsbanken.se

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