The housing market is poised for a potential rise in prices this year, driven in part by a slowdown in construction following interest rate hikes. However, activity and transaction volume in the secondary market have started to pick up again, indicating a resurgence in demand, according to financial advisor Söderberg & Partner’s strategic report.
“After a period where homebuyers chose to wait due to uncertainty surrounding interest rate developments, purchasing power, and the job market in recent years,” stated investment strategist Henrik Eriksson in the report.
Another factor that could impact prices in an upward direction is the proposals to raise the mortgage cap and introduce a milder amortization requirement. If implemented, prices could increase by approximately 5%, the assessment suggests.
Higher rent increases:
In recent years, property companies have focused on improving their indebtedness. The companies are also in a period of higher rent increases.
The single most important factor for rising prices is that the Riksbank continues with its rate cuts.
“Lower interest rates obviously benefit companies’ investments in residential properties but also individual households’ investments in apartments and single-family homes. Barometer data already shows that households have become increasingly optimistic about the economic outlook,” Henriksson writes, concluding:
“This, in turn, could increase optimism among households and lead to a positive cycle where both consumption, company valuations, and housing prices rise.”