Swedish home prices stage recovery after central bank rate cuts

SWEDEN’S home prices continued to advance last month as lower borrowing costs support a housing market that suffered one of the world’s worst post-pandemic slumps.

In February, the average price of apartments increased by nearly 5 per cent compared with a year ago while the price for detached houses gained 3.1 per cent, according to data published on Friday (Mar 7) by Svensk Maklarstatistik, owned by the Swedish Association of Real Estate Agents.

The positive trend comes as the Riksbank in January cut rates for the sixth – and likely last – time, in the current easing cycle. Reductions totaling 175 basis points have brought the rate to 2.25 per cent, the lowest level in more than two years. That’s directly benefited homeowners in Sweden given a high proportion of borrowers have mortgages tied to short-term and floating rates.

Svensk Maklarstatistik also noted a material increase in the number of homes sold during February, showing the market is thawing after years of little to no activity. Last month 4,200 detached houses and 9,300 apartments were sold, corresponding to increases of 13 per cent and 3 per cent, respectively, compared with a year ago.

“The number of detached houses sold continues to be at a record level for the third month in a row,” said Svensk Maklarstatistik’s Hans Flink. BLOOMBERG