Swedish home prices extend gains as market shows signs of thaw

SWEDISH housing prises rose for a second month in March and sales numbers perked up, suggesting that expectations of a near-term cut in interest rates are giving a boost to the recently-ailing market.

Apartment prices rose by 1.8 per cent in March from the prior month, while the average price of detached houses increased by 1.1 per cent, according to data published on Tuesday (Apr 9) by Svensk Maklarstatistik, which is owned by the Association of Swedish Real Estate Agents. That follows gains of 0.4 per cent and 0.5 per cent, respectively, in February.

“The March figures show a thaw with more deals and increased prices,” the association’s chief executive, Oskar Oholm, said, adding “there may still be setbacks”. Also, the closing prices are now on average “just above” the starting bids, he said.

The number of homes sold during the first three months of 2024 rose 8 per cent from a year earlier to 37,100, with gains driven by single-family houses, up 12 per cent. The transaction volume for flats increased by 7 per cent.

Swedish households, among some of the most indebted in Europe, have turned less gloomy in the past months as slowing inflation has helped restore purchasing power. An added boost came from the central bank which last month signalled that the benchmark interest rate may be cut as early as May. A housing-price indicator from Sweden’s largest lender SEB published on Monday also showed more than half of the respondents now believe prices will gain. BLOOMBERG