The survey was conducted in the midst of recent Emerging Markets unrest, and more shaky risk appetite, which may have affected sentiment somewhat. Going forward, SEB’s experts expect solid real income growth, based on expansive fiscal policy and an improving labour market, to support consumer sentiment.
In addition, while there are now increasing signs of a pick-up in residential construction, the supply of housing is still far from enough to match population growth. Therefore SEB’s experts stick to their scenario of another modest increase in home prices ( around 5 per cent) this year.
In more detail, the survey shows a vast majority, 61 per cent of the responding households (unchanged from Jan), continue to expect home prices to rise. Only 14 per cent (Jan 12 per cent) expect prices to fall, while 19 per cent (Jan 18 per cent) expect unchanged prices. Sentiment declined in most areas except Stockholm, which remains the most optimistic, and mid-Sweden. The South saw the largest decline, following a temporary rise last month.
Home prices increased gradually during 2013, but the upturn has, apart from prices for flats, been more subdued than implied by the SEB indicator and over the last two months prices have even declined slightly, according to both Valueguard's and SCB's statistics. SEB's housing price indicator suggests that this is not the start of a new downward trend but rather caused by short-term volatility.