"We do not rule out that the interest rate may be lowered to below 2 percent. This applies especially if unemployment rises significantly more than what is currently expected and inflation remains below the Swedish Central Bank's target of 2 percent for a longer period", says chief economist Robert Boije in a press release.
At the same time, housing prices are expected to increase by around 4 percent over the next two years, which is in line with other banks' assessments. According to SBAB, however, the outlook remains bleak for housing construction, as a consequence of the economic downturn. The number of new housing starts this year is estimated to amount to 20,000, with a slight increase in the coming years.
"For many housing developers, the past two years have been catastrophic. There will, however, be no quick upswing", says Robert Boije.
