(Bloomberg) — An indicator of housing-construction activity in Sweden rose for the first time in almost two years, reflecting a glimmer of hope for an industry that has been battered by falling property prices.
(Bloomberg) — An indicator of housing-construction activity in Sweden rose for the first time in almost two years, reflecting a glimmer of hope for an industry that has been battered by falling property prices.
The monthly Byggfakta indicator showed that a long decline in construction-industry activity moderated. Adding to the improving outlook, the component of the index that is based on housing starts rose marginally in May, which was the first time since August 2021.
Sweden’s housing market has become emblematic of a global property rout as rising borrowing costs triggered a 15% decline in the value of homes in the Nordic nation. In recent months, there have been signs of a stabilization with more Swedes now believing in rising prices than falling for the first time in a year.
While Byggfakta’s data appear to confirm that picture, builders are still facing a tough situation and most forecasters expect the number of housing starts this year to be around half of what they were in 2022.
Read More: Swedish Home Construction Set to Plummet This Year, Nordea Says
“It’s too soon to say that the downturn is over,” Byggfakta’s head of analysis, Tor Borg, said in a statement. “This may be a temporary stabilization.”
The company’s housing starts index, which uses data on current projects to provide an early indicator of activity in the sector, remains 38% lower than a year ago, indicating an annual rate of 35,000 started homes.
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