HOX/Valueguard data gives further evidence of easing of Sweden’s housing market

Recent data from HOX/Valueguard shows that Sweden’s housing market is indicating evident signs of easing. In seasonally-adjusted terms, prices of apartment have majorly been flat from the start of this year. The small rise in July is regarded as noise in a volatile series, stated Nordea Bank in a research report. Since April, Swedish house prices have remained the same.

The sales volumes on a month-on-month basis fell significantly in June and have continued to remain low in July despite adjusted for the seasonal pattern of lower activity in summer, noted Nordea Bank. House prices fell 15 percent on sequential basis in June. This was the largest drop on monthly basis since October 2011.

The lower activity is possibly because of the amortization law that was set up from June 1. However, the sales volumes on month-on-month basis behave quite erratic and it is quite early to come to such a conclusion, added Nordea Bank. Developments of house price follow the predictions made earlier in 2016 of a decelerating housing market.

“The main reason why we forecast a slowdown in the housing market is that mortgage rates have stopped falling, not because of the amortization requirement,” said Nordea Bank.