Housing Prices in Sweden Decline, but Resilience Remains
Swedish housing prices saw a 0.9 percent decline in July, according to new figures from SBAB and housing site Booli. Nonetheless, it is important to consider seasonal effects, as they indicate a 0.4 percent increase instead. Robert Boije, Chief Economist at SBAB, stated that the price drop is lower than expected and that housing market is displaying “great resilience” considering the rapid rise in interest rates.
Price Drops Lower Than Expected, Despite Rising Interest Rates
Since peak rates last spring, housing prices have decreased by 13.5 percent. Apartment prices saw a more significant decrease at 1.6 percent, with the exception of northern Sweden which experienced an increase in prices. Similarly, house prices dropped 0.5 percent, with the exception of Greater Gothenburg and Stormalmö which saw a rise in prices.
Land Rights Sales Down, as Buyers Await Market Clarity
The trends in the housing market have been further reflected in land rights sales statistics from Hemnet. During the first seven months of the year, 915 sales have been made compared to 1,723 in 2022 and 2,897 the year before. This can be attributed to an increased cost of construction combined with people avoiding taking on double the risk and loan for a period of time due to worries regarding falling house prices.
Housing Market Still Uncertain, but Resilience a Positive Sign
Overall, the statistics reflect an uncertain housing market in Sweden with many factors playing into price changes. Nonetheless, there is evidence of resilience as prices have not dropped as drastically as anticipated despite a rapid increase in interest rates. As such, it is important to be aware of the various factors that could influence any potential housing purchases or investments.
