The trend of rising house prices looks set to continue, according to figures from Swedish Broker Statistics.
A more optimistic view of the economic situation with hopes of interest rate cuts before the summer is seen by several analysts as a contributing factor.
– The housing market is starting to balance out and people dare to take the plunge, says Johan Engström, CEO of the Real Estate Agency.
After a longer period with small price changes on both the condominium and villa markets, a significantly larger change is now taking place. In March, prices for condominiums increased by 1.8 percent throughout the country.
Prices increased the most in Greater Stockholm, where the increase landed at 2.5 percent, followed by Greater Gothenburg at 2.3 percent. There, the prices of villas also rose the most with 1.6 percent. In Greater Stockholm and Stormalmö, the increase was 1.3 percent and in the whole country 1.1 percent.
The rise of 1.8 percent in the country for condominiums according to Swedish real estate statistics’ new figures has only been registered on one occasion before, in March 2022, before a serious downward spiral began.
– We have to go back to the period before the price drop that was initiated by the Ukraine war and the rise in inflation, which meant a price drop for almost all of 2022, says head of analysis Per-Arne Sandegren to TT.
Decline erased
The rise means that in 12 months, condominium prices have now risen by 1.4 percent at national level, while the decline in the housing market has been erased.
However, it is not only rising prices that suggest a serious trend break. In terms of volume, 37,100 homes were sold in the first quarter, an increase of eight percent compared to the same period last year.
– There is still a very high supply, and despite this we are seeing price increases. We see that activity on the housing market is increasing, says Johan Engström at the Real Estate Agency.
Interest psychology
The explanation is connected with a more optimistic view of the economic situation, with hopes for interest rate cuts before the summer. According to several analysts, this has contributed to more housing deals, an increased willingness to buy and the higher housing prices.
Johan Engström at Fastighetsbyrån believes that interest rate psychology drives prices up. Even though we haven’t seen any interest rate cuts, you still feel safer when there is talk of future cuts.
– You can count on your cost, which largely consists of interest. When you didn’t know how high the interest rate would be, you were waiting and uncertain. Much of this is interest rate psychology right now, says Johan Engström.