The housing market has started the year on a negative note. According to fresh figures from Svensk Mäklarstatistik, apartment prices fell by 0.9% and villa prices declined by 0.5%.
On an annual basis, prices are still up – apartments by 5.7% and villas by 4.2%. However, there has been a noticeable drop in apartment prices in Greater Gothenburg, Greater Malmö, and Greater Stockholm, with Stockholm experiencing a nearly 2% decrease. At the same time, prices have risen in all central areas of major cities.
Per-Arne Sandegren, Chief Analyst at Svensk Mäklarstatistik, attributes the price drop in Stockholm to a lack of homes sold at higher prices compared to the county as a whole. On the other hand, Fredrik Kullman, CEO of Bjurfors, believes the price decline may be due to a significant increase in supply since the beginning of the year.
“There are a lot of properties on the market right now. At the same time, demand is strong, creating favorable conditions for price increases. We still believe in an increase of 5-8% throughout the year,” says Fredrik Kullman.
Johan Engström, CEO of Fastighetsbyrån, agrees with Kullman’s assessment. He notes that the record-high inventory is not decreasing as expected, even as more properties are being sold. However, he remains optimistic that a normalization of supply will eventually occur.
Villa prices outside major cities also saw a decrease of nearly 1%. The first month of the year showed a strong market for villas, with a 23% increase in the number of sold villas compared to January of the previous year. Erik Wikander, Vice CEO of Svensk Fastighetsförmedling, sees this as a sign of a market awakening after the fall season.
The stability of interest rates could strengthen the housing market moving forward. Recent data showing higher-than-expected inflation in January has caused some economists to revise their forecasts for future interest rate cuts. Johan Nordenfelt, Information Manager at Erik Olsson Fastighetsförmedling, believes that a stable interest rate environment could benefit both buyers and sellers, making it easier to transact more properties.
With a series of rate cuts behind us and an economy expected to gradually strengthen throughout the year, now is a good time to fulfill your housing needs, according to Erik Wikander of Svensk Fastighetsförmedling. Many indicators suggest that interest rates may have bottomed out at a slightly higher level than previously thought, which may not necessarily be a negative development.
In conclusion, despite the recent downturn in housing prices, the overall market remains resilient with potential for growth in the coming months. It is essential for buyers and sellers to stay informed about market trends and take advantage of the current favorable conditions to make sound real estate decisions.