Swedish bank: 'No further drop' expected for property prices

TT/The Local
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Swedish bank: 'No further drop' expected for property prices
An area of detached houses, villor, in Ekerö. Photo: Fredrik Sandberg/TT

Despite expecting interest rates to rise over the next few months, property prices in Sweden will not drop further, Handelsbanken predicts in a new report.


The bank writes that property prices are now stable and that it is no longer expecting prices to fall further.

"We are raising our predictions for developments in property prices and do not expect a further drop in prices. At the same time, we expect that the increased pressure of costs will continue to weigh down households and that house prices will increase slower than incomes over the next few years," the report reads.


Property prices are now 12 percent lower than at the last peak, with Handelsbanken previously predicting a drop of almost 20 percent.


The bank still believes that the Riksbank central bank will raise the key interest rate by 0.25 percentage points in September and November, with a resulting key interest rate peak of 4.25 percent.

It then predicts that interest rates on mortgages will remain around 4 percent for two years.



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