Sweden’s battered housing market is coping better with the rising borrowing costs than shown by data from the central bank and the statistics office, according to a realtor lobby.
(Bloomberg) — Sweden’s battered housing market is coping better with the rising borrowing costs than shown by data from the central bank and the statistics office, according to a realtor lobby.
Data from Svensk Maklarstatistik, owned by a business organization for real estate brokers, showed a 1% increase in the average price of Swedish apartments in April, while prices for detached houses were unchanged. That marks a third consecutive month of stable or rising prices in both categories, following a long rout that made the Nordic country’s housing market emblematic of a global trend brought on by soaring rate of inflation and central bank tightening.
“Households’ margins have shrunk and consumption has dropped significantly, but the statistics confirm that Swedes prioritize housing,” Joakim Lusensky, head of communication at the realtor organization, Maklarsamfundet, said in a statement.
While Maklarstatistik’s numbers provide some relief to real estate agents, other data indicates that the market is far from a recovery. Prices for single- or two-family homes fell 4% in the first quarter, according to data released by the national statistics office last week, and figures cited by the central bank, based on data provider Valueguard, also showed that housing prices continued their slide in the first quarter.
A separate indicator from Sweden’s largest bank suggested that households remain downbeat on the outlook for the housing market. In the survey, published Monday by SEB AB, 38% of respondents expect falling home prices, while 31% believe in a recovery.
“All arguments still suggest prices have some room to decline more,” SEB economist Marcus Widen said. “Headwinds are still strong as mortgage rates are creeping higher.”
The Riksbank last month increased its benchmark rate to 3.5% from 3% and said another hike is expected in June or September. The central bank expects that the slide in residential property prices will extend to about 20% before reaching a trough in the second half of this year.
According to Maklarstatistik’s data, prices of apartments have retreated by about 11% since a peak in March 2022, while detached houses have lost about 13% of their value in the last year.
(Adds details and chart on SEB data from 5th paragraph.)
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