Sweden’s housing market could be set for 10pc slump, S&P warns
Scandinavian economy ‘undergoing a transformation amid increased supply and the impact of new amortisation requirements’
Sweden’s housing market could lose a tenth of its value after reaching 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 amortisation requirements”, S&P credit analyst Sean Cotten said in a note.
“We project prices could fall by 7-10 per cent from their August peak before stabilising in 2018.”
Fears that Sweden’s property market is headed for a correction have already triggered currency losses, with the krona losing 2 per cent against the euro last week.
Sweden’s economy remains strong, with unemployment falling and activity high
Central bankers have tried to talk down the concerns, but the bank has also highlighted the risks associated with soaring mortgage debt burdens.