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SWEDBANK

Houses becoming less affordable

Swedish house prices fell in the autumn, but rising interest rates mean homes in Sweden are still becoming less affordable to the average Swede, according to new figures from Swedbank.

The median price of detached houses sold in Sweden fell slightly in the third quarter. Average incomes increased during the same period, but mortgage interest rates also rose. The effects of rising incomes and falling prices was not enough to counterbalance the effect of rising interest rates.

Swedbank’s housing index, which measures people’s property purchasing power, fell to 109.7 for the country as a whole, compared to 111.5 for the second quarter.

“The reason that house prices have fallen on a national level, despite rising rapidly in many parts of the country, is that a larger number of houses have been bought in areas with low prices, while fewer purchases have been made in areas with high prices,” said Swedbank’s Cecilia Hermansson.

House purchasing power fell in half of the 48 municipalities looked at by Swedbank, meaning people being forced to cut back on other forms of consumption in order to afford the cost of buying their homes.

Falling house purchasing power will have an effect on house price growth, Hermansson believes.

“The diagrams indicate that it is likely that in one year the level of house price rises will have fallen, and prices could even stabilise,” Hermansson told The Local.

“An increasing number of areas are seeing house price records, while mortgage rates continue to rise. Household incomes may be developing strongly, but not strongly enough to compensate for the effect of higher house prices and interest rates,” Hermansson said.

How house prices develop will depend partly on interest rates. Hermansson said that the Riksbank’s base rate will “rise a bit more,” but said that mortgage rates “may rise by a bit more than the base rate would imply, due to the turbulence on the credit markets.”

Apartment prices in the major cities were already falling, Hermansson said.

“Apartment prices usually have an effect on house prices, with a bit of a delay,” she said.

ECONOMY

Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.

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