Prayers of the Swedish people? More believe in falling house prices…


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Monday, 11 July 2011
The proportion of swedish households who believe in falling house prices in the future has increased dramatically in the past month, from 22 to 33 percent, and those who believe in the rising prices are no longer in the majority.

This is the verdict from banking group SEB in their new housing indicator for July.
According to SEB's economist Gunilla Nystr�m who crunched the numbers, the crisis in Greece and rising interest costs has been blamed for the likely causes of that households had a more negative view of the housing market.


Just over four in ten households, 42 percent, still expect that house prices to rise in the coming year. The month before, the proportion was 51 percent. Same number as before, 20 percent, believe in stagnant prices.

House price indicator (Boprisindikatorn) also shows that households expect the repo rate to reach at least 2.2 percent a year.
"That is well below the Swedish central bank’s (Riksbank's) own interest rate forecast," says Gunilla Nystr�m in a statement.

There has been no lack of concern for households in the spring. Besides Greek crisis, there has also been uncertainty about the U.S. economy, natural disaster in Japan and the unrest in the Middle East and North Africa that influenced the image of the economy. Given that Sweden is a country that must export in order to survive.

“It's also true that the housing market has levelled off since the spring, while households have significantly higher interest costs, said Nystrom.

Asked if there is danger that one could expect a relatively small increase in interest rates:
“It could be a danger that households still had a very strong demand for new loans. Now it is not so, but for the whole of 2011 so far there has been a gradual slowdown in household propensity to take out new loans.”
By Team

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