Swedish home prices rise in May, likely to continue to show stabilization

Swedish home prices rose 2.2 percent sequentially in May, whereas it was up 4.5 percent on a year-on-year basis, according to HOX/Valueguard home price index. The rise in home prices is widespread, although house prices are up more than apartment prices. Apartment prices in Stockholm rose 0.9 percent on the month. Seasonally effects are small in May, not changing much on the numbers. The number of transactions were down.

Home prices fell in the second half of March and in April, but have shown remarkable resilience in spite of the big fall in GDP and economic activity. Home prices are nearly back to the same levels as before the corona crisis.

Consumers are still negative about home prices, indicating some risks to home prices near term. Nevertheless, households have a neutral view on their own economic situation – which underpins the housing market.

“Looking ahead, we expect that home prices will continue to show stabilization due to a low supply and low interest rates, which will be important for the recovery in the domestic economy”, said Nordea Bank in a research report.