Swedish realtors fear falling property prices
Published: 12 Aug 2011 12:38 GMT+02:00
Updated: 12 Aug 2011 12:38 GMT+02:00
"It is going to be tough for vendors. All signs are pointing to a drop in prices,"said Henrik Rundgren, of real estate agent Notar, to Swedish daily Svenska Dagbladet (SvD)
The weekend of August 20th and 21st is often when more apartments and houses are shown than any other time, and this year looks to be no exception, with propective buyers back from their holidays.
However, indications suggest that this year could see falling prices and a good chance for buyers to negotiate price decreases.
Finance minister Anders Borg warned on Thursday that the government will need to revise down its strong economic growth expectations for 2012, due to the global financial market turbulence.
Just how much of a knock-on effect this will have on property prices remains to be seen.
"The recent turbulence makes it really hard to make predictions but we are hoping for a continuing stable market, with prices moving by just a couple of percent one way or the other,” Andreas Jonsson, senior analyst at Nordea, told The Local.
“On one hand the indications are that the lending rate could go up, which would have an effect, but the economy in Sweden is still holding up reasonably well and salaries are also rising, so one should counterbalance the other.”
Much will also depend on forecasts from the Riksbank, which will unveil its plans for interest rates on September 6th.
With supply said to be greater than normal at this time of year, it means the buyer is in a strong position, while for the seller it could be a tough weekend, according to experts.
There are still many apartments left unsold from May and early June that agents will now try to sell once again after the summer break, meaning that the increased supply is likely to create downward price pressure.
Latest statistics show that apartment prices fell by 4 percent in June and SEB's latest property price indicator shows that more people expect property prices to fall rather than rise.
Not everyone is predicting such gloom though.
“There are a lot of mind games, but as long as unemployment does not increase and interest rates don’t pull away, I do not think prices will be affected”, Michael Archer, mortgage manager at Nordea told SvD.