The drop for home prices in Sweden continued unabated in the last month of last year, suggesting that this year could offer little relief for an already troubled housing market.
The overall market is down almost 17 percent since a peak in the spring, according to state-owned mortgage lender SBAB Bank AB, indicating that the 20 percent forecasts made by most economists — including the central bank — could prove too conservative.
The Nordic country is far from alone in suffering from falling property values. After booming during the COVID-19 pandemic, central bank interest-rate hikes have triggered a real-estate downturn in a number of nations globally, including in Canada, Australia and New Zealand.
Photo: Bloomberg
The new data sum up a bad year for Swedish home owners and real-estate firms, who are having to adjust to seeing the value of their properties fall in the wake of the surging cost of living and borrowing, and a gloomy economic outlook.
Last month, home prices fell 2 percent from the previous month, adjusted for seasonal variations, SBAB said yesterday, citing an indicator based on transaction data from its real-estate listing site Booli.
That follows a 2.2 percent decline in November and 2.3 percent in October.
“If unemployment were to increase significantly in the wake of the approaching recession, it’s important that mortgage rates do not continue to rise,” SBAB chief economist Robert Boije said in the statement, adding that this could lead to a “very difficult” situation for the housing market, which could also hit the production of new homes.
Prices for detached houses are now down 19 percent from the peak in the spring of last year, while apartment prices have fallen 14 percent.
The larger drop for house prices than apartments is in part explained by high electricity prices, which make it more costly to heat single-family homes.
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