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The SEB indicator of house prices, which shows the difference between the proportion of households that believe in rising prices and the proportion that believes in falling prices, fell to –26 in May compared to –20 in April.
– The financial impact of the pandemic continues to deepen. Forecasts, slowing growth and rising unemployment have a negative impact on households’ views of the entire economy, and the housing market is no exception. Last month’s decline in the House Price Indicator was the largest we’ve seen in a single month, and this month’s figure further strengthens the picture that house prices are expected to drop, says the SEB private economist Jens Magnusson in a comment.
Of those surveyed, 21 percent believe prices are on the rise in the coming year, compared to 22 percent last month, while 47 percent believe prices are falling, compared to 42 percent. of last month.
More intention to set the interest rate
Of households with fully or partially variable interest rates on their loans, 8 percent say they intend to set the interest rate within the next three-month period, compared to 7 percent last month.
The survey also shows that households believe the repo rate in one year is 0.42 percent, down from 0.48 percent the previous month.
– It is clear that the interest rate expectations at this time are of little importance for the expectations of home prices for households. This month, interest rate expectations fall, but we still see the price index continue to drop. It is the impact of the crisis on employment, income and growth that currently controls expectations of house prices, not what one thinks of the evolution of interest rates, says Jens Magnusson.
