Swedish home prices likely to have dropped again in January

Swedish home prices are expected to have dropped again in January. The HOX/Valueguard is set to be released next week, the same day as the central bank’s monetary policy decision. According to a Nordea Bank research report, the housing market is expected to have recorded another weak print in January. Looking at the weekly figures from Booli Pro, further declines are likely in January.

We forecast that home prices showed yet another decline in January. Apartment prices in Stockholm also continued down.

“We pencil in home prices at -0.5 percent over the month (seasonally adjusted) and -3.6  percent over the year. In Stockholm, we expect that apartment prices fell by 1.0 percent m/m (seasonally adjusted), which implies a drop by 10 percent over the year and by 11 percent since the peak in May”, stated Nordea Bank.

Supply continues to be high and is likely to remain a drag on prices in the near-term. But there still might be good arguments for prices to stabilize soon. While demand is underpinned by low mortgage rates and good income growth, supply growth is likely to fall going forward, added Nordea Bank.

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