Swedish households grew more optimistic on housing prices as the country’s central bank has signaled it may start reducing borrowing costs in the first half of this year.
SEB AB’s housing price indicator for this month rose 6 points to 25, with 45% of respondents now expecting prices to rise compared with 20% who anticipate a decrease, according to a statement published Monday. The February print was the highest since April 2022.
“After adjusting for seasonality, the beginning of the year was slightly weaker than the outright numbers suggest,” SEB economist Marcus Widen said. “However, real estate agents see turnover rising again, suggesting more people are prepared to close a deal compared to last year.”
Swedes Are More Positive on Housing Market Prospects
The reading comes as the Swedish Riksbank has signaled that it may cut its benchmark rate if inflation rates continue a downward trajectory. That could buoy a market that has weakened again in recent months, following a stabilization through most of 2023.
For now, the direction of housing prices remains uncertain, as unemployment is expected to rise this year and the supply of homes for sale is unusually large. The central bank has also warned that geopolitical turmoil could upend easing plans if it leads to supply chain disruptions or a weakening of the Swedish currency.
In the survey, respondents said they expect the benchmark Riksbank rate to be 3.77% in a year’s time, unchanged from the prior month.