(Bloomberg) — A closely watched gauge of Swedish house prices fell to its lowest level since the global financial crisis amid higher mortgage rates and inflation accelerating to a three-decade high.
For the month of August, SEB’s Swedish housing price indicator – which represents the difference between the percentage of respondents who believe in rising prices versus those who expect a fall – fell 15 points to minus 42, the lowest since 2008.
“All in all, with little evidence of a near-term turnaround in household sentiment, our best guess is that both the indicator and house prices will continue lower,” SEB economist Marcus Widen said in a research note.
Read more: Swedish housing prices fall the most since the financial crisis
Widen also pointed to the power market as a further headwind for the country’s real estate sector. “A less energy efficient home is likely to be less attractive in the housing market, or buyers are likely to demand a large discount,” he said.
The percentage of Swedish households who expected a price drop amounted to 57% in August, while those who still believe in rising prices decreased to 15% compared to 24% the previous month. The survey covered approximately 1,000 households between 26 July and 2 August.
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