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.

Swedish housing prices head south

”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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Swedish housing market continues to slide

Flat prices fell by 6 percent in Sweden and house prices by 2 percent in July compared to the previous month, according to fresh figures from Sweden’s real estate statistics website Mäklarstatistik.

Swedish housing market continues to slide

Despite this marking the fourth month in a row that flat prices have fallen in Sweden, Claudia Wörman of the Association of Swedish Real Estate Agents (Mäklarsamfundet) says that it’s too early to be concerned.

“I’d be more worried if there weren’t any buyer interest but I am assured that there is,” said Claudia Wörman, head of analysis at the association to The Local.

While the statistics indicated a downward trend nationwide, in some areas, home prices continue to edge up.

Apartments in central and greater Stockholm, for example, rose by 2 percent in July following two months of declines.

Apartments in central and greater Malmö also rose in July by 3 and 5 percent, respectively, while prices in central Gothenburg rose by 1 percent.

Wörman explained that there has been a definite change in the market, but whether this is a temporary dip or something more long term is too soon to say.

“We are monitoring the situation closely, especially the developments over August and September,” she said.

According to Wörman, there are many reasons behind the falling prices. And the property market is all about psychology, she told The Local.

“Even if we have a relatively stable economy here in Sweden the crises in Greece and in the US will have an effect on us as well, not in the least because it creates a feeling of insecurity,” said Wörman.

Another contributing factor is the 85 percent mortgage ceiling, introduced last year, which has had an affect on the market.

However, Wörman doesn’t think that the downward trend will necessarily continue to dominate the market.

“Unless we have a massive rise in unemployment I find it hard to believe we are going to see a significant slump. This is the nature of the housing market – it fluctuates. We are pretty well off here in Sweden, ” she told The Local.