Swedish housing prices head south

Swedish housing prices head south
The last three months show a distinct slowdown on the Swedish housing market, according to Sweden’s real estate statistics website Mäklarstatistik.

”We now have enough information to say that there is a small dip in prices. And we still think that developments will stay calm over the next few months, with one percent up or down,” said Lars-Erik Nykvist, CEO at real estate agency Fastighetsbyrån to daily Dagens Nyheter (DN).

Apartment prices fell all across Sweden between June and August compared to the period covering March to May.

The statistics also show that the housing prices in Sweden’s bigger cities have fallen more than in less built up areas.

The biggest fall was in central Malmö where prices fell by 8 percent.

In Stockholm and Gothenburg the market fell by between 1 and 2 percent. House prices also decreased during the same period, according to Mäklarstatistik.

According to Nykvist there are many reasons for the slowdown of the market.

One of these is the record-high inventory of properties on the market.

However, the fear of increased interest rates is also ever present in the buyer’s mind, said Nykvist.

Swedish bank SEB presneted figures earlier in the week showing that Swedish households believe in falling housing prices in the near future.

However, according to Nykvist, it is unlikelt that Sweden will see any sudden changes up or down on the market in the near future.

Mäklarstatistik also analysed the effects of the mortgage ceiling, put into effect in October 2010.

”Many believed that the mortgage ceiling would make it difficult for first-time buyers to get onto the housing market and that this would lessen demand on small flats, especilally in smaller cities,” Nykvist said in a statement.

However, the analysis has not shown any indication that prices have fallen to a higher degree for small flats in city areas or that the prices have developed differently in different housing categories.

”It is however uncertain whether some groups have been excluded from the market, even if that is not reflected in the prices,” said Nykvist.

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