The month of November was a gloomy period for housing sellers, SBAB’s and Booli’s housing index shows. In Sweden as a whole, housing prices fell by 1.4 percent, with a fall of 0.8 and 0.7 percent respectively for villa and apartment prices.
Even cleaned of temporary effects and seasonal patterns, a decline is noted, minus 0.5 percent, and it is now the third month in a row that a decline has been measured.
The price drop means that you have to go back all the way to 2015 to find equally low real apartment prices and back to 2017 for villas. The price drop since housing prices were at their peak is now 15 percent if you weigh villas and apartments together, notes Robert Boije, chief economist at the state bank SBAB.
– We actually think that prices may fall a little more before the situation turns around. We foresee that it will take until February-March before we see the bottom in apartment prices, he tells TT.
Pauses interest rate increases
Recently, the Riksbank announced that it is putting a temporary pause on interest rate increases, and many market participants predict interest rate cuts starting next summer. Despite that, however, Robert Boije and SBAB see no reason for the housing market to turn sharply upwards next year, rather it will be a 2024 marked by small market movements.
– Our forecast is more or less stagnant prices with an increase of two percent. It will stand and stomp more or less.
Several factors determine
Several factors now contribute to that picture, including a continued large market supply but also the fact that many condominium associations will most likely need to raise their monthly fees significantly at the turn of the year to pare expenses, SBAB assesses.
– It should do it, says Robert Boije about a possible market impact.
– There have been more associations than usual that have increased during the current year, but these are fairly moderate increases, 10-15 percent. For example, Nabo (a property manager for condominium associations) has said that many associations have to increase by 40 percent and that they have not done so yet is thanks to having fixed loans that have not yet expired.