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Scandinavia’s Hottest Housing Market Hits Limit as Rates Plateau

In Sweden, where residential property prices have almost doubled over the past decade, household borrowing slowed for the first time in four years in June. A Valueguard index showed that Swedish housing prices fell 1.5% in June from May, following a drop of 0.6% in the previous month. The housing market in Sweden has been fuelled in recent years by a lac k of supply and by record-low central bank rates needed to revive inflation. The development should be welcome news for policy makers, who have long warned of the risks posed by soaring home prices. It could also free them to refrain from further regulatory measures to stem debt growth. However, as rising asset prices usually result in households being more willing to spend, a slowdown in the housing market could make Swedes more cautious with their money. Less consumer spending might keep down inflation in the country. (Bloomberg)

 

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