The outlook for Sweden’s residential property market stayed in positive territory for a fourth consecutive month despite fewer respondents expecting prices to rise, according to a survey from the country’s largest bank.
(Bloomberg) — The outlook for Sweden’s residential property market stayed in positive territory for a fourth consecutive month despite fewer respondents expecting prices to rise, according to a survey from the country’s largest bank.
SEB AB’s housing price indicator fell by 9 units to 6 in September, according to data released on Monday. The metric represents the difference between the proportion of people who believe in rising prices versus those who expect to see a decline. The historical average is 32.
“Home prices have stabilized and the indicator at this level is in line with largely unchanged home prices year on year,” SEB economists Daniel Bergvall and Marcus Widen said in a note.
Signs of stabilization in what has been one of the world’s worst property routs have also been seen in recent data from realtor group Svensk Maklarstatistik and from state-owned lender SBAB. But with the market currently down by about 10% from a peak in 2022, many commentators — including SEB — are still calling for prices to fall by 15% to 20% overall.
“We expect a further decline in home prices in the coming quarters as an effect of rising rates, and because inflation-eroded household income forces households to allocate less of their budget for accommodation,” Bergvall and Widen said.
The monthly drop in SEB’s index was driven both by more responders expecting prices to fall and fewer responders expecting prices to rise. The share of undecided or expecting prices to stay unchanged also increased. Rate expectations in the survey were largely unchanged in September, staying very close to 4%, according to SEB.
Sweden’s central bank is widely expected to raise its benchmark rate to 4% from 3.75% at a meeting later this month, and some economists predict borrowing costs will rise further as the Riksbank continues to battle a weak krona and stubborn price increases on services.
Read More: Sweden September SEB Housing Price Indicator: Summary (Table)
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