The bank is predicting that a reduction in the Riksbank's key interest rate to 1.75 percent and a relaxation of the 85 percent mortgage cap likely in September next year will lead to rising house prices in 2025 and 2026.
"We expect prices to increase by around 5 percent in 2025 and 6 to 7 percent in 2026," Mattias Persson, the bank's chief economist, said in a press statement.
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While Sweden is still currently in the economic doldrums with growing unemployment, the bank said it expects the economy to start to bounce back in 2025, with consumer spending creeping up, and economic growth rising to 2 percent from the 0.6 percent expected this year.
"We believe that households will start consuming more next year as incomes continue to increase faster than prices while interest rates fall further," Persson said.
Unemployment, the bank predicted, would peak at about 8.7 percent in the first half of 2025 before starting to slowly ebb down.
As a result of the re-election of US President Donald Trump, the bank has reduced its growth expectation for 2026 down to 3 percent, taking into account the risk that Trump will bring in tariffs that will have a dampening effect on parts of the Swedish economy.
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