Swedish home prices rise year-on-year in October

Swedish home prices remained mostly same sequentially in October, whereas it rose on a year-on-year basis. The HOX/Valueguard home price index showed that the home prices dropped 0.1 percent sequentially and rose 3.5 percent year-on-year.

Taking seasonal effects into account, home prices rose 1.1 percent sequentially. Prices of apartment as well as house also rose. Apartment prices in Stockholm rose 1.2 percent on the month.

Overall, apartment prices have picked up some growth moment in the last six months. Households are positive about home prices, likely because of decreasing supply and low long-term rates, noted Nordea Bank in a research report.

The one-off rate hike from the Riksbank might boost home prices further if households interpret this as a confirmation that low rates are a permanent state. Meanwhile, the uptick in unemployment might imply some downward risks to the forecast of modestly increasing home prices in the near term.

“Rising home prices support domestic demand and, on the margin, brighten outlook for households”, added Nordea Bank.