Lower inflation, interest rate and tax cuts, and also - higher real wages. Swedish households will get significantly greater purchasing power in the coming years.
Handelsbanken's forecast now shows that a household with median wages and a normal-sized mortgage will get around 3,700 kronor more per month in 2025 compared to 2024.
The assessment is that the Swedish Central Bank will continue to lower the repo rate to 2.25 percent from the current level of 2.75 percent in February. All this also contributes to a recovery in the housing market, as well as rising prices.
We see that more homes are being both sold and bought now, so activity is in full swing, but at the same time, there is a large supply, notes Christina Nyman.
Ongoing Uncertainty
The price increase of around 4 percent is slightly lower than what competitor Swedbank recently forecast in a similar forecast. Christina Nyman notes that there is ongoing uncertainty, including regarding the government inquiry that was recently presented on changed amortization requirements.
We haven't taken this into account. It depends a bit on how the proposal will be designed and it's quite uncertain whether they will go for the proposal entirely or partially, she says.
Rushed Strongly
During the pandemic, prices on villas, among other things, rushed strongly, but even though interest rates are now falling sharply, it won't be a repeat, Handelsbanken predicts.
We don't expect the kind of strong price increases we had during the zero-interest period. On average, mortgage rates will be higher, and that also limits borrowing capacity. We therefore see a slightly more moderate price increase rate, says Christina Nyman.
