Many homeowners may be facing a double financial blow. A majority of brokers now believe that house prices, which rose slightly in the spring, will fall. More brokers are pessimistic now compared to last autumn, shows a survey from the state bank SBAB.
– There has been a small price increase in the big cities. But the trend is still negative for housing prices throughout Sweden, in March there was only one exception and that was condominiums in Stockholm. That trend is expected to strengthen, says Linda Jonsson, housing economist at SBAB, to the Economic Agency.
Mortgage expires
At the same time, many fixed mortgages expire this year and to be renegotiated at an interest rate that is getting higher and higher. For example, Danske Bank has already acted after the Riksbank’s interest rate increase on Wednesday. At Danske bank, the list interest rate for a mortgage with a three-month commitment period is at the time of writing 5.29 percent – an increase of 40 points. Several banks may act in a similar way.
– Interest rates will have to be at a high level for a long time to come, but in a few years we may lower them. But you still have to be prepared for the world to be different. We may have to live with the fact that interest rates will not return to the low interest rates we had, says Anna Breman, Deputy Governor of the Riksbank.
Can raise even more
Alfred Kammer, head of the IMF in Europe, also believes in continued high interest rates in Sweden and falling prices on the housing market.
– We see that the interest rate increases that have been made will lead to falling prices, he says.
And according to Anna Breman, interest rates may even rise further:
– We could end up with higher inflation, and in that case we may have to raise interest rates higher than what we say in the forecast, she says.
Hear the IMF chief’s forecast for the Swedish economy in the clip above – and don’t miss the Economic Agency’s latest episode Near the interest rate peak on SVT Play.
