Sweden sees summer drop in property prices
TT/The Local · 14 Jul 2015, 14:07
Published: 14 Jul 2015 12:03 GMT+02:00
Updated: 14 Jul 2015 14:07 GMT+02:00
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After a year of soaring property prices in Sweden, they either remained stable or dropped across the Nordic country last month, according to figures released by Svensk Mäklarstatistik on Monday.
Apartment prices in Sweden fell by 1.0 percent in June, compared to the previous month, said the firm which analyses real estate statistics. Conversely, the price tag on the average detached house climbed by 1.0 percent – but was expected to fall again later this summer.
“There are very small movements at the start of the summer. This is often the case, and it is usually followed by a drop in July,” Svensk Mäklarstatistik's head analyst Per-Arne Sandegren told Swedish news agency TT on Monday.
And according to another index -- the key Hox index by Valueguard-KTH which also takes into account the types of homes being sold -- property prices fell by 0.6 percent in June, the first drop since November last year.
READ ALSO: What the weak krona means for you
Despite its reputation for being an expensive country, the Swedish property market offers surprisingly cheap bargains. And if you are paying in pounds or dollars, the weak krona is likely to sweeten the deal even further.
Johan Vesterberg, head of press for Sweden's largest estate agent, Fastighetsbyrån, told The Local earlier this year that with just a €100,000 budget “you can find a decent property in most parts of the country”.
While the price of properties has dropped in the past month, they remain more expensive than this time last year. The average price for detached homes and apartments in Sweden is now 2,623,000 kronor ($307,950, up by 11 percent since last year) and 33,587 kronor per square metre (up by 14 percent), according to Svensk Mäklarstatistik.
Meanwhile, the price of summer homes has risen more sharply than expected in the past year. The average price for a holiday property is now 1,561,000 kronor, up by 8.0 percent since 2014.
“That's a lot for holiday homes. The figure is usually at around 3-4 percent,” said Sandegren and added that increased demand had created the price push.
However, on the mainstream property market prices are expected to continue to fall in coming weeks, following a general trend in Sweden which has spent the year locked in a battle with low inflation.
New figures from Statistics Sweden revealed on Monday that the rate of inflation is currently at -0.4 percent, compared to 0.1 percent in May, despite the Central Bank (Riksbanken) recently slashing interest rates yet again in an attempt to jump start the country's economy.
“An inflation rate around or below zero is no success for Riksbanken, you can say as much. Everything suggests that Riksbanken will have to continue its expansive policies,” Åke Gustafsson, senior analyst at Swedbank, told TT.