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According to Svensk Maklarstatistik, in July 2022, apartments in Sweden fell by 4% on a monthly basis. It was the fastest decline since the beginning of the pandemic. The year-on-year decline was 2%. Private homes fell by 1% compared to June, but rose by 1% year-on-year.
Capital. The monthly drop in apartment prices in the metropolitan area accelerated to 5%, and the drop in three months increased to 10%. The cost of private homes in the Stockholm area has now fallen by 6% on average in three months.
Reasons. The statistics highlight the challenge facing the Riksbank as it faces the consequences of its efforts to cool the economy and control inflation. Officials have doubled the pace of interest rate hikes at a time when Swedes are facing the biggest rise in consumer prices in three decades.
While there was a boom in real estate markets in other countries during the pandemic, Swedish household debts grew faster than in the G7 countries. Riksbank manager Stefan Ingves once compared this predicament to "sitting on top of a volcano."
Swedish house price indicator SEB, a key indicator of the real estate market, has fallen to its lowest level since the global financial crisis, as data showed earlier this week.
The Riksbank expects house prices in Sweden to fall by 16% by the end of 2023, according to its June monetary policy report.
Source: Bloomberg
Photo by Jon Flobrant on Unsplash
