Swedish home prices rise sequentially in May

Swedish home prices rose sequentially in May, but the transaction volumes for flats remained low. On a month-on-month basis, home prices rose 0.5 percent, showed the data from HOX Valueguard, consistent with the 0.5 percent forecast. On a year-on-year basis, prices fell 4 percent. In Stockholm, apartment prices rose 0.5 percent sequentially and fell 8.5 percent year-on-year.

The May figures affirm that home prices seem to have stabilized in 2018, compared to the marked downturn seen last fall. Developments are consistent with the view of home price stabilization. Weekly statistics for June imply that prices continue to be fairly stable, consistent with previous June months.

Transaction volumes for flats continued to decline in May, adding uncertainty to price developments longer out. The high supply, in particular for newly built homes, is a continued risk factor for a continued drop in home prices. But, interest rates in Sweden and Europe would continue to be low for a long time yet, which speaks against another big downturn in home prices, as households’ housing costs are also significant for prices longer out, stated Nordea Bank.

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