search

City/District
PRICE
PRICE
-
Bedrooms
city/keyword
search
detailed search
type
size
size
- sqm
Floor
View
extras
search
simple search
November 15th, 2016

Soaring house prices in Sweden

Negative interest rates in the Scandinavian country have created a property market with quickly growing house prices. Now the current situation has become an "unnecessary reality," a chief analyst at Nordea bank has told CNBC. Here comes a short summary.



"The Riksbank could easily change tack if they wanted to, still growing house prices is an unnecessary reality which we have to live with," said Henrik Unell, chief analyst with Nordea. Sweden's central bank, the Riksbank, had shocked investors in recent years by becoming one of the economic pioneers of negative interest rates.


Denmark, Switzerland and Japan's central banks have all since followed suit. And it is this that which has significantly contributed to soaring house prices. He went onto add, "You really have to be in complete denial if you do not see the correlation between lower interest rates and increasingly high housing prices."


House prices skyrocketing

The CNBC report also informed that according to Svensk Maklarstatistik, a property and trade association of Swedish real estate agents, single-family home prices spiked by 10 percent year on year in September, with apartment prices jumping up by 7 percent year on year.

Sweden's house prices have skyrocketed since the late 1990's which has subsequently resulted in household debt rising to among the highest in the world. In relation to gross domestic product, GDP, household debt jumped up to 84.60 percent in the first quarter of 2016.

In comparison to the U.S. household debt in the world's largest economy decreased in the first quarter of 2016 to 78.4 percent. Though the US is managing its housing prices more effectively, housing supply is likely to become a catalyst for prices rising further still.


Stricter regulations

Anna Breman, chief economist at Swedbank, argued that the country’s housing market is finally slowing down, in part, due to changes to repayments introduced by the Swedish financial supervisory authority. She told CNBC that housing prices are still increasing but at a much lower rate as compared to a year ago. She is optimistic that they will be effective in calming the markets in Stockholm and Gothenburg where house prices have increased the most.


What’s next?

Breman projected that the Riksbank would hold the repo rate at 0.50 percent though does expect the bank to extend its current quantitative easing program through until the second quarter of 2017. The current program is scheduled to finish at the end of the year. Unell agreed but added that as a result of poor inflation figures in Sweden released recently, a rate cut of 10 basis points further into the negative territory should be expected. He also added that monetary policy is the main game in town and Riksbank can immediately slow down the housing market if they so choose.


(Source: http://www.cnbc.com/2016/10/21/soaring-house-prices-in-sweden-an-unnecessary-reality-analyst.html)

 

 

Interested in buying a property in Budapest?

Interested in buying a property in Budapest?

Contact us to get a tailor made investment advice from the Budapest market specialist.

 

Send Enquiry

Market News

We keep you posted on property prices in Budapest and real estate market trends in Hungary

How Real Estate Investors Can Enter Hungary Now?

Good news: you can still get entry to Hungary if you are planning a business travel from the EU, the European Economic Area and many more countries. You only need documents that verify the purpose of your travel.  ...

Increasing Number of Foreign Property Buyers in Budapest

3753 properties were sold to international buyers in 2019 which is 6% growth compared to the year before.   According to the recently published data on kormany.hu (official site of the Hungarian Government) the...

Housing and Rental Prices Change in Hungary and Europe

According to Eurostat’s analysis, the real estate market in Hungary is slowing down, which is good news for investors, buyers and tenants alike. In half a year, Hungary slipped from the first to the tenth place...

InterNations: Budapest Among the Top 20 Cities

InterNations has compiled a list of the 2019 worst and best cities for expats called Expat Insider. Budapest finished in the top 10 in the local cost of living category, but also achieved remarkable results in other...

The Largest Stadium in Hungary was Opened in Budapest

A new national stadium opened in Budapest after 66 years. The match, which started at seven o'clock in the evening, opened the largest and most modern facility in Central Europe. Hungary and Uruguay were playing on the...

Developing Budapest - The Latest Developments of the Liget Project have been Released

The latest developments of the Liget Budapest Project have been completed. The Playground and Millennium House has opened their doors to visitors. The Városliget (City Park) is one of the first public parks in...

Subscribe to our mailing list

Tower Investment
Contact Us Now on Phone or via Form

H-1053 Budapest, Egyetem tér 5.
Tel.: +36 1 808 9777
info@tower-investments.comwww.tower-investments.com

© 2019 Tower Investments | All rights reserved
Prices of apartments are indicative only. Pricing and availability should be confirmed with Tower International.

Softexit

Searching for the Best Property Service?

Contact us today and let us guide you in the Budapest real estate market!

  • Trusted by 4000+ clients
  • More than 15 years of experience
  • Leading Property Experts for Foreigners

“I’ve managed to restaure and sell a flat in Budapest. Tower was the most professional and I was happy of my choice.”
- Maximilien

“They have very dedicated, thoughtful and professional staff”
- Hoáng

Excellent personal service, efficient and friendly. Highly recommended for buying real estate.”
- Ian