"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.
What do you think?