SEBs housing price indicator stable

HOUSEHOLDS REMAIN SLIGHTLY OPTIMISTIC. The housing price indicator has shown very small movements since the recovery in spring. In October, the housing price indicator was almost unchanged, declining slightly to +10 from +11 the previous month. The share of respondents believing in unchanged prices remained at 24%, while the share expecting rising prices declined marginally to 38% (cf. 39%). The share expecting falling prices was unchanged at 25%. STABLE HOUSING MARKET. House prices according to SCB data have moved roughly sideways since recovering from the trough in the beginning of the year. The housing price indicator suggests continued stable or slightly rising prices going forward. LARGE REGIONAL VARIATIONS. While sentiment declined in most regions during October, households in Stockholm have remained very optimistic on prices. Households in other regions, most notably the North and South, have on the other hand turned markedly more pessimistic with Southern households now, on the balance, seeing declining prices. This confirms the picture that a overheated housing market remains very much a Stockholm phenomenon.

MONDAY 8 OCT, 2012

RATE CUT DID NOT BOOST SENTIMENT. The gradual slowdown in household lending growth to a more long-term sustainable pace has eased some of the concerns at the Riksbank over risks from the housing market and probably contributed to the rate cut in September. Data since the cut shows a renewed slight acceleration in lending. However, monthly variations are large and we do not think that this should be interpreted as a change in the trend. The stable housing price indicator supports this conclusion, indicating that cheaper credit is off-set by a slightly more pessimistic view on the economy and the labour market. HOUSEHOLDS SEE UNCHANGED RATES AHEAD. As regards rates, households continue to forecast roughly unchanged rates in one years time (1.30% vs 1.53% last month when the repo rate was still at 1.50%). We expect the Riksbank to cut the repo rate by another 25bps to 1.00% in December and see an increased downside risk to our current forecast of rates bottoming at that level.
Elisabet Kopelman , +46 8 506 230 17

Since March 2003 weve contracted Demoskop to survey the Swedish housing market every month. This survey was conducted 25 sep 3 oct, 2012.

SEB's Housing Price Indicator

80
40

SEB's Regional Housing Price Indicator

60 40 20 0 -20 -40 -60 -80

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: SEB, Demoskop

35 30 25 20

10

15 10 5 -

Aug Sep Oct

M id

kh ol m

rn

SW es

-10 -15

St oc

or th e

SE as

-5

So ut

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