The average price of Swedish homes fell 1 percent in the three months to the end of March from the previous three-month period, the statistics office (SCB) said on Wednesday.
Despite an acute shortage of affordable rental housing, many Swedish property developers have focused on building more profitable and expensive, tenant-owned apartments in major cities in the last couple of years.
Housing market dangers are “especially acute” in Australia, Hong Kong, Canada and Sweden, Oxford Economics said, noting this has historically posed a threat to economic activity.
Government borrowing restrictions and a spike in new construction have softened the market in Sweden, although historic homes are still in demand.
Prices of single-family homes were unchanged, according to the Svensk Maklarstatistik association
Swedish home prices rose 3.4 percent month on month in seasonally strong January, after four months with falling prices, the Nasdaq OMX Valueguard-KTH Housing Index (HOX) showed on Wednesday.
Compared with the July-September period, apartment prices were down 1 percent while single-family home prices were unchanged.
Prices of single-family homes rose 9 %, the Svensk Maklarstatistik association said
After Toronto, Stockholm, Munich, Vancouver, Sydney, London and Hong Kong round out the top six, according to the banking giant's latest Global Real Estate Bubble Index
Home prices in Sweden have increased sharply since the 2008 global financial crisis, driven by the combination of a strong economy, low mortgage rates, a chronic housing shortage and rapid population growth, specifically an influx of refugees and others moving to urban centers for jobs and schools. But even during the recession Sweden’s real estate market didn’t suffer much, thanks to the shortage of housing and the swift countermeasures taken by the government and central bank, said Olof Manner, head of research for Swedbank, a financial services group based in Stockholm.
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