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Swedish home prices remain largely unchanged in September, prices to stay stable going forward

Swedish home prices stayed largely unchanged in the month of September. Prices are expected to remain stable going forward. HOX Valueguard showed that home prices dropped 0.1 percent sequentially. Expectations were for a rise of 0.5 percent. On a year-on-year basis, house prices fell 3.6 percent and prices are down 5.3 percent from the peak in August 2017.

Stockholm apartments had seen the biggest fall in prices last year and the price level is still about 8.6 percent below all-time high levels noted in 2017. Prices remained stable sequentially which was consistent with the projection of unchanged prices. In Stockholm, apartment prices have dropped 5.4 percent year-on-year.

“Going forward we expect that prices will remain stable. Moreover the number of transactions has been stable over the year, both in the total market as well as in Stockholm. This also supports our view on unchanged prices”, stated Nordea Bank.

Ample supply signifies that risks are tilted towards the downside. Moreover, the Swedish central bank is mostly expected to hike the interest rate in December 2018 that could impact house prices negatively. A major part of the households in Sweden has floating mortgage rates that would be impacted a rate hike. Nevertheless, since the rate hike is expected to be one-off, mortgage rates are expected to stay low in the coming years, added Nordea Bank.

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