Home prices were down by a mere 0.2% over the month, which is a relatively strong figure considering that December usually is a slow month on the housing market. Adjusted for this seasonal pattern, prices increased 0.9%. Growth in house prices, which has been the main driver for the surge in home prices during the pandemic, has eased somewhat and increased 0.7% m/m. Apartment prices, which have been close to the pre-pandemic average until this summer, are instead catching up and were up by an impressive 1.3% on the month.

When balancing the books for 2021, we can look back at another strong year on the Swedish housing market. Due to the slowdown this fall, the year concluded with an increase by 7.5% since January – just a tad below the 2020 figure. House prices saw a somewhat slower increase than the record year in 2020, while apartment prices fared better than last year, see charts below.

Since April 2020, house and apartment prices have increased 29% and 18% respectively.

Looking into 2022, house supply remains depressed while the supply of apartments is at relatively normal levels. Housing starts have picked up and the growth of new homes is faster than population growth, which could boost supply later this year.

On the demand side, increasing interest rates will be a key theme on the housing market in 2022 and several institutions have already increased mortgage rates. Hence, the Swedish housing market will be put to test this year as financing conditions are set to tighten. As the corona virus (hopefully) loosens its grip of the economy in 2022, the housing market could be affected by normalising housing preferences and consumption patterns.

Stay tuned for our updated housing market forecast in the latest edition of Economic Outlook, released today 9:00 CET.