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The forecast: Higher housing prices next year

The economy is weak and unemployment is high. But next year, there may be a brightening, predicts Swedbank in an economic forecast. "We expect housing prices to increase by around 5 percent in 2025," says chief economist Mattias Persson in a press release.

» Published: 12 November 2024

The forecast: Higher housing prices next year
Photo: Caisa Rasmussen/TT

In its economic report, the major bank notes that the Swedish economy is still weak. The recovery is delayed and growth is expected to decline.

"But we believe that households will start consuming more next year as incomes continue to rise faster than prices, while interest rates fall further," says Persson.

The assessment is that unemployment will peak at 8.7 percent and then start to turn around during the first half of 2025.

Swedbank expects the Swedish Central Bank to continue cutting interest rates, down to 1.75 percent by 2025. It is currently 2.75 percent.

This will benefit the housing market. Prices are therefore expected to increase by around 5 percent in 2025 and 6-7 percent in 2026.

The bank estimates that the Swedish economy will develop weakly this year, 0.6 percent. Next year, they expect GDP to grow by around 2 percent, followed by nearly 3 percent in 2026.

"The outcome of the US election increases uncertainty and we have revised down growth prospects slightly for 2026," says Persson.

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By TTThis article has been altered and translated by Sweden Herald

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