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 organisation for real estate brokers, showed a 1 per cent 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 rates of inflation and central bank tightening. Households’ margins have shrunk and consumption has dropped significantly, but the statistics confirm that Swedes prioritise housing.
While Maklarstatistik’s numbers provide some relief to real estate agents, other data indicates that the market is far from a recovery. An index published by state-owned lender SBAB last week showed a 1 per cent decline in April, and the bank’s Chief Economist, Robert Boije, said further price drops are likely as central-bank rate hikes translate into higher borrowing costs.
Figures cited by the Riksbank in its latest monetary policy report in April, based on data provider Valueguard, showed housing prices continued their slide in the first quarter, slipping 1.1 per cent from the previous quarter. Prices for single- or two-family homes fell 4 per cent in the first quarter, according to data from the national statistics office.
The Riksbank last month increased its benchmark rate to 3.5 per cent from 3 per cent 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 per cent before reaching a trough in the second half of this year.
