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Sweden’s home price decline accelerated in October as the Nordic country grapples with the worst housing crisis in three decades, Bloomberg reported on Monday, citing industry data.
House prices in the country have fallen about 14% from a peak earlier this year, according to Valueguard, which compiles the data. Prices are reported to have fallen for seven consecutive months as households are squeezed by the rising cost of living.
This shows what could happen to many other developed economies, Bloomberg wrote, noting that Sweden’s slowdown was fueled by soaring inflation and central bank actions to rein in rising prices.
The report says the downtrend is unusual in a country where previous corrections have been shallow and short-lived, and where many young homebuyers have never experienced a property crash.
“While housing markets are cooling across the world with fewer transactions, the price decline has yet to begin in a number of countries,” he wrote, noting that house prices in Canada are now down 10% from the peak and that declines of up to 20% are expected for countries like the United States, the United Kingdom and the New Zealand.
“Many homes are sold at levels close to asking price, and bidding wars are rare,” Lansforsakringar Fastighetsformedling managing director Marcus Svanberg said in a statement. “We don’t expect to see a real recovery until the spring of next year at the earliest.”
Soaring inflation dampens Norwegian economy
Valueguard data showed the HOX Sweden house price index fell 3% in October from the previous month, the biggest drop since June. The decline was reportedly led by single-family homes, which are particularly vulnerable to soaring electricity prices.
The outlet also said that most forecasters expect the decline to continue, and “The current trajectory indicates that the outsized gains in house prices made during the pandemic could be erased by early next year.”
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EU countries property market slump worsens – RT Business News
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