Apartment prices fall in Stockholm

Prices for apartments in Stockholm fell in April, with market commentators claiming that this could indicate a broader fall in the hitherto booming housing market across Sweden.

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Tenant-owner apartments (bostadsrätter) in central Stockholm fell by two percent in April, a new report from Mäklarstatistik shows, with price falls of one percent across the greater Stockholm area.

"Price developments in Stockholm's inner city set the trend for the housing market across Sweden. The decline may take the price curve down a notch. We shall have to see how the prices develop in May," said Claudia Wörmann at the Association of Swedish Real Estate Agents (Mäklarsamfundet) to news agency TT.

Prices in central Gothenburg and Malmö however climbed by two and three percent respectively.

According to the SEB bank's latest property price indicator for May, 54 percent of Swedes expect prices to climb, up from 50 percent in April. The number who expect falling prices declined from 15 percent in April to 13 percent in May, although the survey was conducted prior to the Greek debt crisis.

"Households are more optimistic about the economic cycle and the labour market, and the housing market feels stable. It is too early to read in the effects of the Greek debt crisis on the Swedish housing market," Wörmann said.

"There are a lot of people attending apartment showings and it feels as if the market has got going again," she said.

Most market analysts expect the Riksbank to begin hiking interest rates again in the summer.

"It is difficult to submit a forecast for price developments in the autumn. But I think that most households are very conscious that there will be higher interest rates. It is difficult for anyone to project how the financial debt crisis affecting several countries in southern Europe will develop and impact on the economic cycle," said Claudia Wörmann.

Over the past quarter prices for houses and tenant-owner apartments across Sweden have climbed by three percent. Over the past year prices have increased by eight and 11 percent respectively.

Mäklarstatistik is a cooperation between the Association of Swedish Real Estate Agents, and estate agents Fastighetsbyrån and Svensk Fastighetsförmedling. The statistics are based on sales contracts covering around 70 percent of the Swedish estate agent controlled market.