According to the survey a majority, 57 per cent of respondents, expected house prices to rise, while the share expecting falling prices decreased to 12 per cent, with 23 per cent expecting unchanged prices. Most regions reported an increase in sentiment, but in the south, sentiment declined for the third month running, still reflecting some contagion effects from the battered Danish housing market. Stockholm respondents remain the most optimistic on house prices.
The indicator remains at levels signalling rising house prices in Sweden and although prices were flat in July, they have been on a gradual rising trend since the beginning of the year. The housing price indicator suggests that this trend is likely to continue.
Consumer confidence rose back above the historical average for the first time in two years in the July survey from Sweden’s National Institute of Economic Research (NIER). Current levels of the housing price indicator suggest consumer confidence could pick-up further in the August survey (published Aug 28).
Rising house prices and more confident consumers also support SEB’s forecast for a further rise in lending growth to 5.0-5.5 per cent and suggest that the household debt will remain high on the Riksbank agenda.