Housing prices rose in August - but are expected to fall

Housing prices rose by 2 percent in August, according to new statistics from SBAB. Now a autumn is awaited where the Swedish Central Bank has flagged for several interest rate cuts. If inflation jumps up again and the Swedish Central Bank does not lower the interest rate, it would be quite negative for the housing market, says Robert Boije.

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Housing prices rose in August - but are expected to fall
Photo: Judit Nilsson / SvD / TT

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For villas, the increase in August was 2.2 percent and for apartments 1.5 percent. Adjusted for season, the increase was 0.7 percent for the country as a whole.

According to Robert Boije, chief economist at SBAB, an increase was expected since prices usually rise in August. However, they rose somewhat more than normal for the month.

We look at seasonal patterns and normally, housing prices rise during the spring months, then the summer months are a bit down, and then comes August, he says.

After that, housing prices usually fall in September to December, but it's uncertain what will happen this autumn.

Now everyone expects the interest rate to go down. If inflation jumps up again and the central bank doesn't lower the interest rate, it would be quite negative for the housing market.

It's the longer fixed interest rates that usually have the greatest effect on housing prices, according to Boije. Since they have already fallen, he believes it "should be priced in" in the market already.

Activity will certainly increase on the housing market, but I have a hard time seeing huge price movements.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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