SBAB forecasts that despite an expected interest rate cut this fall, Swedish housing prices will remain largely unchanged this year. The sluggish economy and cautious consumer spending have kept the housing market stable, with only a 1% price increase anticipated. However, a stronger economy and lower unemployment next year could lead to a 5-6% rise in housing prices.
SBAB Predicts Stable Housing Prices Despite Interest Rate Cuts
SBAB Predicts Stable Housing Prices Despite Interest Rate Cuts
An interest rate cut is expected this fall. However, housing prices are predicted to remain largely stable, according to a new economic report from the state-owned bank SBAB.
The Swedish economy continues to struggle, and households are holding back on spending, which has been reflected in the housing market. By the end of the year, housing prices are expected to have increased by only one percent, slightly less for condominiums than for houses, according to SBAB's chief economist Robert Boije.
This is despite the expectation that the Riksbank will cut interest rates once more this fall, according to his assessment. The government's unusually large budget initiative for 2026 should not affect inflation more than marginally "and should not pose an obstacle to a reduction in the policy rate" and thereby lower variable mortgage rates, writes Boije.
Next year, the economy is expected to gain momentum, resulting in lower unemployment, and housing prices are therefore expected to increase by around 5-6 percent, according to SBAB's forecast.