People in Sweden have become more pessimistic about house prices, with the bank SEB’s September housing indicator showing a rise in the share who expect falling prices.
According to the bank’s monthly house price expectations survey, the share of households who think prices will rise in the coming year has fallen six percentage points to 35 percent, while the share who expect prices to fall has risen by three percentage points to 29 percent.
“Housing price expectations have long resisted following economic developments but the expected fall has finally come,” said Américo Fernández, SEB’s private economist, in a statement.
He said that a lower-than-expected turnout of buyers at the first weekend for house viewings after the summer break appeared to have dispelled sellers’ expectations for higher prices.
“This month, economic reality and the chilly reception to the big viewing weekend appears to have forced households to lower their future expectations somewhat,” he continued. “In the coming autumn, we can expect a peak in interest rates, wavering power prices, and ever emptier wallets, which taken together suggests a suppressed and uncertain situation for house prices.”
The households surveyed expected the core interest rate from the Riksbank to hit 3.99 percent in the coming year, a slight decrease in the 4.02 percent average in the bank’s August survey. The share of households planning to shift to a fixed interest rate mortgage also fell from 8 percent to 7 percent.
There was, however, some variation between regions.
The housing price indicator, which subtracts the share of households which expect prices to fall from the share which expect prices to rise, fell in four regions in Sweden, rose in one, and stayed stable in one.
In Gothenburg, the indicator fell 23 points from 26 to 3, and in Stockholm it fell ten points from 18 to 8. In Skåne, it fell from 18 to 10 points, and in Svealand excluding Stockholm, it fell from 15 to 8 points.
In Östra Götaland, the indicator remained stable at 0 points, while in Norrland it rose from 10 to 15.
The market research agency Demoskop interviewed 1,000 people over the internet for the survey, which was carried out between August 29th and September 5th.
Source : The Local