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Swedish house prices start falling


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Thursday, 30 June 2011
It is not yet clear if this will be a celebration or fears from sectors of the Swedish economy but what we have been expecting in the Swedish housing sector has started happening. Home prices fell in all three Swedish metropolitan areas in the second quarter and the decline is expected to continue in the third quarter, to a lesser extent than in the second quarter.
 
A survey of over 200 real estate dealers in the Greater Stockholm, Greater Gothenburg and Greater Malm´┐Ż according to CMA Research conducted on behalf of mortgage company SBAB exposed this phenomenon.

The survey shows that an excess of 50 percent of brokers reported that housing prices declined in the second quarter. For single-family homes, the corresponding share was 45 percent.

An excess amount, about 81 percent of brokers say that sales of condominiums have taken longer than expected to sell and the corresponding figure for houses is 76 percent. The difference between the sale and the asking price, which is an indicator of the auction, has also fallen significantly.

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SBAB notes that the housing market was characterized by a sharp increased in supply in the second quarter, an increase was expected by brokers, but it was larger than forecast. Brokers' expectations in the previous survey were of an unchanged demand for condominiums and increased demand for houses was also too optimistic.

Before the third quarter, brokers sees continued fall in prices, but the decline is expected to be less than the second quarter. For condominiums, it is an overweight of 20 percent of brokers who expect falling prices for houses and the proportion is 28 percent.

"However, few expect the slump in prices, but the vast majority of brokers expect falling house prices, expected that the decline will be modest, "writes SBAB.

The survey also shows that the uncertainty in price forecasts have increased, 40 percent of brokers see more uncertainty than usual compared with 29 percent in the previous poll.

"Greece crisis, weak economic signals and the downturn in the stock market in recent months may be factors that have increased the uncertainty in the brokers' forecasts of housing prices.”

There may also be an uncertainty among agents about how much the overall effect is on housing demand of rising mortgage rates, mortgage ceiling and increased demands for the repayments on mortgages, "writes SBAB's chief economist Tomas Pousette in a statement.

He also notes that brokers now seem hard to assess the demand of housing purchase.
"The forecasts of a continued decline in home prices during the third quarter is thus more uncertain than usual and should be interpreted cautiously, "writes Thomas Pousette.
By Scancomark.se Team


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