City property prices continue to cool

Apartments prices fell in Stockholm and Gothenburg in May, with house prices remaining stable, according to new broker statistics which show that supply remains larger than normal.

“The market right now is characterized by a wide selection of objects. The price increase we have seen in recent years have thus started to wane, especially in big cities,” said Lars-Erik Nykvist CEO at estate agent Fastighetsbyrån.

The figures indicate that the Stockholm market continues to cool off after a long period of booming prices. Apartment prices in central and suburban areas fell by 1 percent in May, according to Mäklarstatistik figures.

Gothenburg apartment prices fell by 2 percent in both inner city and suburban areas, while Malmö bucked the negative trend with prices in central areas climbing 2 percent while remaining still in the suburbs.

National statistics showed a climbed in apartment prices in May however, thanks to booming markets in other smaller cities.

House prices remained unchanged nationwide with 1 percent rises in Stockholm, and 2 percent in Malmö and Gothenburg.

Lars-Erik Nykvist underlined however that the changes remained relatively slight.

“Price changes are small and we see that there are buyers for this very large supply. For us it is a matter of having 16 percent more items up for sale, in comparison with May last year.”

He argues that the large supply of housing in part due to a hangover from the icy winter which left the residential market in the deep freeze.

“We are not forecasting any major changes even if the first interest rate increase draws near. Both banks and households have ensured a margin and interest rate rises as well as the introduction of a mortgage ceiling will not come as a surprise to anyone.”

The market performing strongest on an annualized basis is for second homes, with prices up 5 percent on May 2009. Over the past three months national apartment prices have climbed by 3 percent and house prices by 2 percent.

Properties in Sweden

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