Swedish home prices rose in November. HOX/Valueguard home price index showed that home prices rose 0.3 percent sequentially and rose 4.5 percent year-on-year. Apartment prices in Stockholm rose 0.8 percent on the month. Taking seasonal effects into account, home prices rose 1.3 percent sequentially. Both apartment and house prices also rose.
Home price growth momentum has accelerated in the last six months, especially apartment prices in Stockholm. Households are positive about home prices, likely because of decreasing supply and low long-term rates. The supply has also dropped, underpinning home prices.
The expected one-off rate hike from the Swedish central bank might boost home prices further if households interpret this as a confirmation that low rates are a permanent state, noted Nordea Bank in a research report. The flattening of the rate path indicates as much. Meanwhile, households continue to be gloomy about the general economic outlook in Sweden which might pose some downward risks to forecast of modestly rising home prices in the near term.
“Rising home prices support domestic demand and, on the margin, brighten outlook for households”, added Nordea Bank.
