Swedish home prices rise year-on-year in November, likely to remain stable going forward

Swedish home prices rose on a year-on-year basis in November. Prices rose 0.8 percent year-on-year in the month, whereas it was up 0.5 percent sequentially. Apartment prices in Stockholm rose 0.3 percent year-on-year and 0.6 percent sequentially. The last four months has seen a rise in home prices and apartment prices in Stockholm. Since the start of the year, home prices have risen 1 percent while apartment prices in Stockholm have risen 1.5 percent. Nevertheless, current prices are still below peak levels.

Transactions volumes for apartments have dropped since the start of 2018. Stricter credit requirements from banks, as well as a forthcoming interest rate hike might have made households more cautious.

“Our view of stable prices going forward remains. The Riksbank will probably hike the repo rate next week but we believe that to be a one-off. That means that the households can continue to enjoy low interest rates for a while”, said Nordea Bank.

Strong labor market also supports the view of unchanged prices. At present, jobless rate is at 6.1 percent and the proportion of companies reporting labor shortages is record high.