Is the rising trend in Swedish property prices beginning to reverse?

Is the rising trend in Swedish property prices beginning to reverse?
Property prices are falling in Sweden after a record year. Photo: Fredrik Sandberg/TT
The booming Swedish property market seems to be slowing down after a period of exceptional growth during the pandemic.

After reporting record highs as recently as June this year, experts are beginning to see signs that this trend is changing.

In July, apartment prices fell in all regions of Sweden – with the exception of Greater Malmö, according to state-owned lender SBAB and property website Booli. In Greater Stockholm they saw a drop of 2.6 percent.

This means property prices for apartments have now fallen for the last two months, said SBAB and Booli in a new press release.

Although summer usually spells a slight decline for property prices, the recent decrease in July cannot be explained by usual seasonal patterns, said Robert Boije, chief economist for SBAB.

“It is becoming more and more clear that we are entering a calmer period on the property market. We have now had two months with red figures in our three biggest cities,” he explained, although he cautioned against making too wide assumptions based on one month alone.

“The increase in prices began to slow in April and developments since then show that the price development for apartments has slowed down considerably.”

The trend is also apparent in prices for detached houses. They have seen a price drop of 3.4 percent in Greater Gothenburg and 4.4 percent in Greater Malmö.

“The drop in prices for detached houses in Greater Gothenburg and Greater Malmö are relatively large. This follows a period where house prices have seen a considerably larger increase than apartment prices, which can probably be explained by a continued demand for more living space during the pandemic. But this trend seems to be slowing down for detached houses, too,” said Boije.

It is possible that apartment prices will rise again in August, in line with usual trends. However, we should expect a calmer autumn with “subdued growth” on the property market, he added.


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