Swedish home prices resume slide, led by detached houses

SWEDISH single-family homes extended a housing rout in the largest Nordic nation last month, with stubbornly high inflation and growing borrowing costs clouding the outlook.

An underlying trend figure for the residential property market in Sweden — among the worst-hit globally — showed a decline of 0.8 per cent in March, according to data by state-owned mortgage lender SBAB, published on Monday (Apr 3). This compares with February’s 0.6 per cent fall that was also the best showing in 10 months.

The data follows news last month showing the market was taking a break from a year-long price slide that pushed home prices about 15 per cent lower, on a nominal basis. Most forecasters still expect prices to fall a further 5 percentage points from the peak, as the Riksbank is pledging more key rate hikes to cool core inflation that’s rising at its fastest pace in more than 30 years.

SBAB’s chief economist Robert Boije called the March development “surprisingly strong”. Still, he expects “significantly weaker development going forward if the Riksbank continues to raise the policy rate and inflation continues to remain at high levels”.

House prices, which benefited from a larger surge in demand during the pandemic, declined 1.5 per cent in March, while apartment prices were unchanged, according to the trend indicator. That compares with a 1.4 per cent fall for houses and a gain of 0.1 per cent for apartments the previous month. BLOOMBERG