Sweden’s housing starts fall in 2017, likely to decline further in 2018

Swedish housing starts have leveled out; however, they have not fallen. The wobbling housing market is the second half of 2017 is yet to be seen in the housing starts data.

Over the past year, Sweden’s housing starts have remained greatly flat. The outcome for the fourth quarter was greatly consistent with the projection. In the fourth quarter, housing starts came in at 15,500, while Nordea’s forecast remained at 15,800.

Statistics Sweden showed that the nation recorded around 64,000 housing starts last year. This was close to Nordea Bank’s projection of 65,000. A gradual decline in housing starts to 58,000 is expected in 2018, and 50,000 in 2019. The Riksbank has marginally higher projection.

The lower housing investments are expected to be a drag on the economic growth this year and next year. But the lower domestic demand is greatly expected to be offset by stronger exports, leading to a continued strong economic growth.

“From today’s number we see no reasons to change our forecast of GDP-growth at 2.6 percent in 2018 and 2.0 percent in 2019. The Riksbank’s forecast stands at 2.8 percent and 1.8 percent, respectively”, added Nordea Bank.

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