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Swedish home prices fall below expectations in July

Swedish home prices came out slightly below expectations in July. Home prices fell 0.5 percent sequentially, showed the data from HOX Valuegaurd, which was slightly below the forecast of unchanged prices. Prices fell 4.9 percent year-on-year, as compared with the projection of a fall of 4.5 percent. Prices fell more in Stockholm, where apartment prices dropped 1 percent on the month, and fell 8 percent year-on-year.

Transactions are few in July that signifies that today’s figures do not necessarily provide a good indicator of the underlying trend. The continued high supply, in particularly for newly built homes, continues to be a risk factor for a continued decline in home prices.

The Stockholm market is deemed as especially vulnerable in this sense. The average price in Stockholm has fallen sharply during the summer, in spite of a rather stable development of prices per square meter. This implies that sellers of larger and more expensive objects still struggle. Moreover, if 2017 is any guidance this could be an indication of upcoming price pressures in more general, noted Nordea Bank.

“However, to see another marked fall in home prices, households’ housing costs must probably increase – something we do not expect to happen in the near term. We continue to see stable prices ahead but with downside risks”, added Nordea Bank.

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