Swedish Housing Market to Stabilize

Property prices in Sweden will stabilize this year after a dip in the last few months of 2017, with the effect on GDP growth relatively limited, banking group Nordea said on Wednesday in an economic outlook, Reuters reported. In a separate outlook, Swedbank forecast the housing market will stabilize later this year with unchanged prices overall in 2018. Housing market trends create uncertainty about growth and inflation, Nordea said. “We expect housing prices to stabilize after the decline in 2017. Even so, recent housing market trends will have repercussions, most notably in the form of decelerating housing construction,” Nordea said. Rising interest rates will be a challenge for the Scandinavian housing markets 2019 and beyond, it said. Nordea says it sees housing starts falling to 50,000 in 2019 from the 27-year-high of 65,000 last year. Meanwhile, Swedbank says price decline for tenant-owned flats to bottom out at 10-15% from peak in greater Stockholm and Gothenburg during second half of 2018. A housing price decline in excess of 15% overall would lower growth and cause recession, Swedbank said.