The Quotes are Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.





Market News


Advertisement





Swedish house prices rise continue to record levels despite warning alarms of a bubble

Tuesday, 17 September 2013
Swedish house prices continue to increase despite various warnings that house price rise in the Swedish real-estate sector is not economically healthy.
According to new data from the sector and market analysis, there is currently a massive jump in price of houses around the country, which is also is being described as a new record, reports Valueguard price index which is now operating at a very high ever.
Valueguard writes in a reports today that, overall price index for private housing in Sweden HOXSWE, rose by 2.3 per cent from July to August. Index of condominiums in the country has also gone up 1.7 percent and the index for houses rose by 2.7 percent. It also notes that the index fell slightly between June and July. Compared with June, the increase of HOXSWE  was 1.6 percent. 

All official HOXSWE index rose. With the exception of Malmö, all indices for both villas and condominiums stood at its highest level ever. For Malmö it remained 7.7 per cent for houses and 8.5 per cent for condominiums to the previous highest levels of February 2011 and August 2007.

swedish-houseA Swedish compound on thh market
Those who have warned Sweden of its persistent house price rise includes the IMF, because in its recent report on the 5th of September, it posited that the Swedish economy was ticking on a housing bubble time bomb and that the government must do something about its mortgage policy. In addition, the Swedish Financial Supervisory has also flagged for stricter requirements for amortization of housing prices in order to try to stem the situation. However, this seems be persistent house price growth.
The IMF wrote on the 5th of September that Sweden faces risks in the growth of its household debts driven by easy access to low-amortization mortgages, and very low interest rates. As a consequence, a sudden and sizeable fall in Swedish property prices could have a knock-on effect on consumption and unemployment, with negative repercussions on banks through non-performing loans and funding costs.

However, banks remain heavily dependent on wholesale funding and credit to households continues to expand, with mortgage amortization low by international standards.
In that light, the prices of condominiums are now at their highest levels ever in several parts of the country, according Valueguard. In Stockholm condominium prices rose by 1.5 percent in August, in Gothenburg and Malmö it rose 1.1 percent to 0.9 percent.

"With the exception of Malmö, all indices for both villas and condominiums are at their  highest level ever. For Malmö it remains 7.7 per cent for houses and 8.5 per cent for condominiums to the previous highest levels from February 2011 and August 2007, "writes Valueguard in a comment.

The villa Market has previously lagged in the Swedish housing market, but that changed in August when all the price rose by 2.7 percent, according Valueguard. Most of the prices rise is observed in Gothenburg, 4.3 per cent, while house prices went up by 2.5 and 0.5 percent in Stockholm and Malmö.

The new figures from Value Guard is a further indication that house prices continue to climb. Recently, SEB's house price indicator also showed that six out of ten households expect higher prices in the coming year. Their "bopris indicator" rose in September to its highest level since July 2007.
Industry representatives have however tried to cool the rhetoric by pointing that prices continued to rise, albeit at a slower pace than before. The range of both condominiums and villas are much lower now than a year ago and in the metropolitan areas, there is a shortage of houses that is creating an emergency situation.
by Scancomark.com Team

 We welcome your contribution. Did you find anything wrong with this article? Do you want to contribute to our    news network? Do have a news tip or assist us with a correction? 

Print Friendly and PDF