Swedish home prices rise sequentially in August, overall trend remains flat

Swedish home prices rose slightly in August; however, the overall trend in 2018 continues to be flat so far. Transactions came in much lower than usual in August. The data from HOX Valueguard showed that home prices rose 0.5 percent sequentially and dropped 4.7 percent year-on-year. This was slightly below the forecast of 1 percent sequentially and a fall of 4.5 percent year-on-year. Prices of apartment in Stockholm rose 0.6 percent sequentially and dropped 7.4 percent year-on-year. The overall trend of stable prices in 2018 continues to be intact so far.

However, the number of transactions fell noticeably in August. On a year-on-year basis, the number of sold tenant-owned flats fell 31 percent. The number of transactions dropped the most in Greater Stockholm by 35 percent, but notable downturns were also recorded in Malmo and Goteborg. The fall in transactions might show a continued uncertainty or anxiety in the market.

The supply of homes continues to be comparatively high, in particular for newly built homes, but has not picked up further in recent weeks. Even if the elevated supply might continue to be a drag on prices it might possibly not be sufficient to set off a more notable downturn, noted Nordea Bank in a research report.

“In sum, we continue to see stable prices ahead, in line with development so far in 2018”, added Nordea Bank.