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Today's Solid Real Estate Market Faces an Uncertain Future

Over the last few years, the Swedish real estate market has been red-hot. In the preface you can also read a macro economic analysis of the Swedish and global development, written by economist Klas Eklund.

Although Sweden's economy is on the rise, there are a number of aspects that could threaten the positive development. An uncertain fiscal position, threat of tightened bank policies, geopolitical turbulence and the risk of overproduction of the "wrong" kind of property, are all phenomena that could cause the Swedish real estate market to de-stabilise.

Since 2014, the Swedish transaction market has surpassed itself year by year and the first half of 2017 seems to follow a similar path and reach high levels, even though not in line with the record year 2016. Newsec does not yet see any weakening of the Swedish real estate market. Rather, the slightly lower half-year volume can be explained by a mismatch of supply and demand of attractive property.

"Our overall assessment is that the 2017 real estate year will be very strong, although with a slightly smaller volume than the record year 2016. Potential threats to the positive development could come from external factors, for example a significant international crisis, reversal bills or great changes in interest rate levels. But if only one or two of these occur, our assessment is that we are facing a slowdown rather than a crash. If several external events coincide, more dramatic consequences could become reality", says Max Barclay, Head of Newsec Advisory in Sweden.

The market report Newsec Property Outlook has been published since 2001. Newsec Property Outlook is a comprehensive and free report analysing the real estate market in Northern Europe, with a focus on the Nordics and Baltics. The report is a convenient tool for investors, property owners and local users.

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Annika Wahlund Communication Manager