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Swedish house prices 'dangerously high': report

TT/Clara Guibourg · 11 Jul 2011, 13:52

Published: 11 Jul 2011 13:52 GMT+02:00

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Only Hong Kong, Australia and France are considered to have more inflated prices.

Housing prices are described as "dangerously" high in the report by financial newspaper The Economist, which has based calculations on both nominal and actual prices, as well as prices in relation to household income and banks' interest rates.

However, it seems as though a steeply rising price development may now be coming to a halt. In 2010 house prices in Sweden rose by 10.7 percent. The latest twelve months, however, have seen a rise of no more than 2.2 percent.

The latest survey on Swedes' expectations of future housing prices and interest rates, published by Swedish bank SEB on Monday, showed a similar trend.

The percentage of households who believe prices will drop has increased greatly over the past month, from 22 to 33 percent, and those who believe will continue to rise are no longer in the majority, dropping from 51 to 42 percent.

"This is a dramatic fall, we've rarely had such a steep drop in just one month," said SEB's private economist Gunilla Nyström to news agency TT.

Story continues below…

"The crisis in Greece and rising interest rates, which for many households have lead to a tighter budget compared to last year, are likely explanations to this more negative attitude to the housing market," she said in a statement.

SEB's survey is based on interviews with 1,000 Swedes.

TT/Clara Guibourg (news@thelocal.se)

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Your comments about this article

16:01 July 11, 2011 by SimonDMontfort
"The percentage of households who believe prices will drop has increased greatly over the past month, from 22 to 33 percent, and those who believe will continue to rise are no longer in the majority, dropping from 51 to 42 percent."

If 42% of the survey thought prices will rise, while only 33% thought they would fall, how can the 'risers' no longer be 'in the majority'?

Contradiction here anyone? Or is it just my understanding at fault?
16:34 July 11, 2011 by Shibumi
I'm guessing that the remaining 25% (100-33-42) answered "I don't know/care" or that prices would remain stable. 33% (prices will drop) + 25% (prices stable/don't know) = 58%. That does indeed leave the 42% of "prices will rise" in the minority.
19:34 July 11, 2011 by mikmak
prices cannot fall, housing shortage...pricing cannot fall, housing shortage...pricing...bzzz...fall...shortage, shortage....gzunk...
20:44 July 11, 2011 by Great Scott
That's it Gunilla blame someone else for the problem. The real truth as to why house prices are more than likely to fall is the increase in unemployment in Sweden.

However house prices have been overhyped for a long time, as already been published, it is not if but when house prices shall fall. I suggest home owners put some form of protecting clothing on ready for the crash, and for those who think it's not going happen don't say you were not warned.
01:50 July 13, 2011 by xiongyishi1234
i hople house prices is not going to drop, just a hope as i am currently redecorating my household and then i am selling it... not so fast! please =(
10:12 July 13, 2011 by Maggie Malay
SimonD is right - more people seem to think that 'house prices will rise'

@Shibumi - the 25% of people that either don't know/think prices will remain stable, could be taken either way.

E.g 42%+25% = 67% of the survey believe that house prices will remain stable or rise (not fall)

Now you can see why so many business and political organizations employ these pseudo-scientists to help them analyse results like these. Lol!
08:14 July 17, 2011 by svenscum
Looking at previous trends in housing markets in other countries, people should be aware of the dangers. If you can sell, sell. Be careful about buying now at the top of the market it could be the worst investment you ever made.
22:13 July 22, 2011 by rohermoker
I am afraidfor the Swed's. You all know whet happened here in the US. When people stop spending on things they don't need or can no longer afford the "house" of cards starts to come apart. I just hope your wages go up to cover for the increase.
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