The outlook for Sweden’s residential property market climbed into positive territory for a third consecutive month, according to a survey from the country’s largest bank.
(Bloomberg) — The outlook for Sweden’s residential property market climbed into positive territory for a third consecutive month, according to a survey from the country’s largest bank.
SEB AB’s housing price indicator rose by 1 point to 15 in August, according to data released on Monday. The metric represents the difference between the proportion of respondents who believe in rising prices versus those who expect to see a decline.
“The indicator continues to show the highest reading since May last year but still is below its historical average of 32,” SEB economists Daniel Bergvall and Marcus Widen said in a note.
Swedish housing prices were little changed in July, as the battered market entered a wait-and-see mode before activity picks up again after the summer, according to last week’s data from realtor organization Svensk Maklarstatistik.
Read More: Swedish Housing Market Still on Edge as Summer Lull Brings Calm
While Sweden’s housing market has recouped some losses from a 2022 rout brought on by high inflation and aggressive interest-rate increases, there is still a risk of further price declines as the Riksbank is expected to raise its benchmark rate at least one more time this year. In SEB’s latest survey, Swedish households expect the central bank’s policy rate at 4.01% in a year’s time versus 3.85% in July.
Looking ahead to the rest of the year, “rising mortgage rates and the consequent squeeze on real household income should have an impact on house prices and we therefore stick to the view that we will see a second round of prices turning lower,” the SEB economists said.
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