Between May and June, the number of Swedish households that believed that house prices would rise over the next year decreased by 2 percentage points.
However, 60 percent of those surveyed still expected property prices to grow over the next year, according to a property price indicator by SEB bank.
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“After seven months of rising house price expectations, the House Price Indicator finally slowed down in line with previous rises in its more than 20-year history,” SEB private economist Américo Fernández said in a press statement.
The number of households expecting prices to fall decreased by one percentage point to 9 percent, with the number of those expecting prices to remain the same increasing by 2 points to 20 percent.
But is this sentiment among Swedish households also mirrored among property market experts?
An unusual market situation
After a period of price drops due to rising interest rates, the Swedish housing market is rebounding, particularly in major cities.
Given the current conditions in the market, it’s tough to say definitively whether sellers or buyers have the upper hand, Joakim Lusensky, the head of analysis and communications at the Association of Swedish Real Estate Agents, told The Local Sweden.
“I would describe the current market as somewhat unusual in the sense that it is both a buyer’s and a seller’s market,” he said.
“The supply is bigger than it has been for many years, so there are many options and lots to choose from for a prospective buyer, and at the same time, prices have been moving slowly upwards in combination with a shorter average time on the market for both apartments and houses,” Lusensky said.
When asked which parts of the country offer the best opportunities for homebuyers, the expert noted, “It’s impossible to give a general answer to that. My advice is to view homebuying not primarily as an investment to time the market but as a way to meet long-term housing needs tailored to your specific circumstances.”
Lusensky also shared his advice for prospective buyers.
“If you are looking to buy, the summer can be a good time, given that the competition is usually lower and that the supply of apartments and houses are at historically high levels. If you also plan to sell, discuss with your bank well in advance because, at the moment, most banks require you to sell before you buy.
“If you are buying an apartment, make efforts to understand the financial situation of the housing cooperative (bostadsrättsförening) and whether there are any loans that are up for renegotiation in the near future or if there are any planned major works and renovation – these are factors that can influence your housing costs directly,” he advised.
Activity and prices increasing again in bigger cities
In an interview last week, Erik Holmberg, a market analyst at Hemnet, shared a similar analysis of property price prospects with The Local Sweden.
“In Sweden, we often talk of having a seller’s or buyer’s market. Today, it’s good for buyers to have a lot to choose from; there’s a record-high supply almost everywhere in the country. That means it’s easy to find something,” said Holmberg.
As the analyst explained, in Sweden, housing market trends usually start in Stockholm, when the market starts to change, causing a ripple effect.
“And that’s what we have seen. Now, market activity and prices are increasing again in the bigger cities. Usually, when the market changes, other areas in the country follow, and that could be the case now.
“When the rates and inflation situation become clearer, other parts of the country might follow the market in the big cities. Our main scenario is that we will see this spread,” he said, adding that prices in Sweden’s capital have picked up relatively fast in the last year but that the demand is still affected by the (high) interest rates.
“I wouldn’t be surprised if we saw swift price developments in some areas with the highest demand, such as city centres.”
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