House prices in Sweden fall again

In November, housing prices in Sweden continued to decline as high interest rates weaken the country's property market.

According to data published by the realtor Svensk Maklarstatistik, the cost of housing in the country decreased by 3% compared to October.

The November figures reinforce concerns that heavily indebted households are cutting back on spending. This, in turn, could pose a threat to Sweden's economic growth.

High home prices in Sweden are explained by low interest rates and insufficient supply in the country. In 2021, house prices in the Scandinavian country were among the highest in the world. However, this has changed after the Swedish Central Bank (Riksbank) raised its key rate to 2.5% last month. The bank is also signaling further rate hikes in the future.

Home prices are now down 13% from their peak at the beginning of this year. Nevertheless, the Riksbank and some forecasters expect an even lower 20% decline in property prices.