Comment on Swedish Brokerage Statistics: Biggest fall in residential property prices in ten years

Housing prices in Sweden fell broadly during July. The largest case was for condominiums, which often have faster price fluctuations than villas. Right-of-occupancy prices fell by 4 percent in the kingdom, while house prices backed by 1 percent, showing new figures from Swedish Brokerage Statistics analysed by Länsförsäkringar Fastighetsförmedling.

"This is the biggest monthly fall in ten years, but since there are always fewer homes sold in July, prices may vary more. If the economic cycle worsens and unemployment rises, prices could fall even more strongly in the future. But most likely, a new equilibrium is emerging where buyers and sellers find each other more easily in terms of prices,says Marcus Svanberg, CEO of Länsförsäkringar Fastighetsförmedling.


The right-of-occupancy prices in Sweden fell by 4 percent in July, which is the biggest decline a single month since July 2012. In Stor-Stockholm prices decreased most – down 5 percent while in central Stockholm they went down by 4 percent. In central Gothenburg the fall was 1 percent and in Stor-Göteborg the prices fell by 2 percent in July. In central Malmö prices decreased by 3 percent and in Stor-Malmö they backed with 1 percent Over the past year, right-of-occupancy prices have fallen by 2 percent in the country as a whole. The biggest decline has been in Dalarna – minus 12 percent, while Norrbotten, plus 9 percent, has had the biggest upturn.


"Even if young and single households are hard hit by rising interest rates and consumer prices, the interest in smaller housing in places with higher education institutions and universities is likely to increase in connection with the start of the semester. Normally, the number of housing transactions increases in late summer and autumn. We believe in a similar pattern even this year, although there will not be as many sales as in recent years,says Marcus Svanberg.


In greater Stockholm, greater Gothenburg, and greater Malmö, house prices fell by 2 percent in the past month, while in the kingdom as a whole they fell by 1 percent. During the year, house prices in the country have increased by 1 percent. In Jämtland, Västernorrland and Värmland, house prices have risen by 7 percent during the year, which is most in the country.


"A total of two out of three Swedes own their housing, and for them rising interest rates combined with high inflation mean that the margins in the housing economy are reduced. For those who are thinking of buying a home in the future, it is wise to make a clear budget and take up a higher interest rate,Marcus Svanberg says.During the year, holiday home prices have risen by 7 percent, a significantly slower rate of increase than the price rally that has been in recent years. However, in Jämtland, prices have risen by 21 percent in the past year, while in Norrbotten they have remained still.

Here, house prices have increased most during the year:

Right-of-occupancy Price evolution Villas Price evolution Free-time residences Price evolution
Norrbotten +9% Jämtland +7% Jämtland +21%
Jönköping County +6% Western Norway +7% Kronoberg +19%
Västerbotten +4% Värmland +7% Halland +12%



Here, house prices have decreased most during the year:

Right-of-occupancy Price evolution Villas Price evolution
Dalarna -12% Östergötland -4%
SÖDERMANLAND -5% Westmanland -2%
Östergötland -5% Halland -1%



Three tips – you can act when interest rates rise


1. Take height for higher housing costs
Count on what happens to your personal finances if the interest rate in the long term amounts to 4-5 percent. What would you have to reduce if housing costs increase? Your bank can help with the calculations.
2. Choose floating or tied interest rates with careIf you want to reduce your risk of higher interest rates than expected and have more predictability for the household economy, it may be a good time to tie the interest rate.
3. Apply for adjustmentThe so-called interest deduction allows borrowers to make tax deductions for some of the interest costs. By applying for adjustment from the Tax Agency, you can pay less tax each month instead of declaring the deduction the following year.
**Three tips – how to make a safe housing deal in a troubled market

  1. Buy and sell at the same time.Housing prices have risen sharply over the past year in large parts of the country. However, as long as you sell and buy at about the same time, temporary increases or falls in price are of minor importance.
    2. Review your housing economy.If you have small margins in the housing economy – plan your purchase based on how rising interest rates and a changed income could affect you.
    3. Sell first.**If you still feel insecure – sell your home before you buy a new one. Then you know the starting point for your purchase and can more easily count on what monthly cost you feel comfortable with.



    For more information, please contact:
    Per Sangrud, Head of Press
    Telephone. 073-441 04 07
    E-mail:per.sangrud@lansfast.se [mailto:per.sangrud@lansfast.se]

Marcus Svanberg, CEO
Telephone. 070-238 21 50
E-mail:marcus.svanberg@lansfast.se [mailto:marcus.svanberg@lansfast.se]Press images free for use:Marcus Svanberg [https://via.tt.se/pressroom/lansfast/mi?publisherId=3235722&item=image-3287641]
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About the statistics

The statistics are derived from the Swedish Brokerage Statistics and are based on the sale of 26 025 tenant-ownerships and 15 512 villas in May 2022–July 2022. The three-month figure is a comparison with February 2022–April 2022, the annual figure is a comparison between May 2021–July 2021 and the one-month figure is a comparison between April 2022–June 2022 and the current period. The price development for villas is based on the K/T century (Purchase sum/Taxation value).The average price is based on the sales of the last month. The price statistics for free-time residences are based on the sales of 5,498 free-time residences in August 2021–July 2022 and the development is compared with the previous twelve-month period.

So, right-of-occupancy prices have changed in big cities:

Region

1 month

3 months

12 months

Average price (kr/sq.m.)

Kingdom

- 4%

- 8%

- 2%

37 673

Central Stockholm

- 4%

- 8%

+ 1%

99 185

Stor-Stockholm

- 5%

- 10%

- 2%

57 041

Central Gothenburg

- 1%

- 5%

± 0%

66 414

Stor-Göteborg

- 2%

- 5%

- 2%

47 257

Central Malmö

- 3%

- 5%

+ 2%

36 300

Big-Malmö

- 1%

- 2%

+ 1%

35 330



Villa prices have changedin the big cities:

Region

1 month

3 months

12 months

Average price

Kingdom

- 1%

- 2%

+ 1%

3 249 000

Stor-Stockholm

- 2%

- 6%

± 0%

5 876 000

Stor-Göteborg

- 2%

- 3%

± 0%

5 489 000

Big-Malmö

- 2%

- 3%

- 2%

4 663 000



The prices of free-time residences have changed in Sweden:

Region

12 months

Average price

Kingdom

+ 7%

2 417 000 SEK



Contact:

Marcus Svanberg, CEO, +46 70-238 21 50, marcus.svanberg@lansfast.se

Per Sangrud, Head of Public Relations and Sustainability, 073-441 04 07, per.sangrud@lansfast.se

From:

Länsförsäkringar Fastighetsförmedling, Tegeluddsvägen 21, 106 50, Stockholm (https://www.lansfast.se/)

About Länsförsäkringar Fastighetsförmedling: Länsförsäkringar Fastighetsförmedlingen's vision is "Safe housing business through life". We want to contribute to a fair and sustainable housing market where more people can change homes as needed. Today, we are Sweden's fastest growing real estate broker and one of the largest players in the industry. During 2021, the company provided approximately 31 000 objects at a sales value of SEK 84.5 billion. We believe that the local proximity is important and believe that this is one of the reasons why we have Sweden's most satisfied customers for the sixth year in a row according to the Swedish Quality Index 2021.