Property prices in Sweden continue to fall in September

Apartment prices have fallen the most in Stockholm (8 percent) over the past three months, followed by Gothenburg (6-7%) and then Malmö (5-7%), with the Swedish Bankers Association recommending that people only buy and sell houses in the current market if absolutely necessary.

"I would recommend people to buy and sell on the basis of their need for housing and not to see housing as they would a share," Hans Flink from the associations statistics arm, Svensk Mäklarstatistik, told the TT newswire. "It's not stocks and shares we're talking about here, that's the wrong way to think." 

Buying new property in Sweden in the current climate is turning out to be a sizeable risk.

The latest findings of the Swedish real estate statistics portray a slow market in a response to the soaring inflation and constantly changing interest rates. The number of completed housing deals has declined throughout the third quarter of 2022, an indication that there is a clear disconnect between buyers and sellers. 

Living in doubt

According to the Swedish Bankers Association, the housing market was first affected by the outbreak of the Covid pandemic in 2020. The demand for single-family homes and larger apartments grew as people needed more space to accommodate working from home, and prices rose significantly as authorities took measures to stabilise sales.

In 2022 though, the growth seen in the past two years has come to an end, mainly due to the crisis in Ukraine. The uncertainty over inflation levels and the resulting costs have kept buyers from taking the plunge. As housing sale volumes slowly return to normal after the pandemic boom, sales are well below normal.

Even if buyers manage to get a lower price, the increased cost of upkeep and services such as electricity, as well as larger interest savings, are likely to mean the overall cost of their purchase is similar.

With current electricity prices, few are willing to dare to invest in a detached house with electric heating, and even those who own houses are rushing to invest in solar panels and wood stoves to bring down their electricity bills.

Flick says he expects the market for detached houses to remain stagnant until there is more clarity on the next government's plans to reimburse consumers for high electricity prices.

"Electricity prices are lying like a damp sheet over the market for detached houses," he said. "Who would dare to buy a house which might be mainly heated by electricity?".

Overall sales volumes, though, are starting to return to where they were in 2019, just before the pandemic. 

"It's not low but more like a normal year. It's not as if people aren't selling houses, in other words. Even if you might not have got the same price your neighbour got earlier, you can still buy your next house a lot cheaper." 

How prices have changed in September: