Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Sweden's Housing Market May Be Facing a 10% Slump, S&P Warns

Published 2017-11-24, 10:09 a/m
Updated 2017-11-24, 02:59 p/m
© Reuters.  Sweden's Housing Market May Be Facing a 10% Slump, S&P Warns

© Reuters. Sweden's Housing Market May Be Facing a 10% Slump, S&P Warns

(Bloomberg) -- Sweden’s housing market could lose a tenth of its value after reaching a tipping point this summer, according to S&P Global Ratings.

The property market in the largest Scandinavian economy is “undergoing a transformation amid increased supply and the impact of new amortization requirements,” S&P credit analyst Sean Cotten said in a note on Friday. “We project prices could fall by 7-10 percent from their August peak before stabilizing in 2018.”

Fears that Sweden’s property market is headed for a correction have already triggered currency losses, with the krona losing 2 percent against the euro last week. Central bankers have tried to talk down the concerns, but the bank has also highlighted the risks associated with soaring mortgage debt burdens.

S&P said prices are likely to fall as stricter amortization requirements coincide with an increase in supply. Meanwhile, the big unknown remains how the market reacts once years of extreme stimulus from the central bank are gradually unwound.

At the same time, Sweden’s economy is strong and S&P said its banks were well-padded against lower house prices.

“Sweden’s economy remains strong, with unemployment falling and activity high,” the rating company said. “In addition, the majority of Sweden’s trading partners are showing positive economic momentum, and Sweden’s household savings and corporate balance sheets
are robust. Consequently, we believe the banks we rate can maintain their current capital and earnings positions.”

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.