Sweden experiences a steeper than usual decrease in property prices during July
In a surprising turn of events, the SBAB Booli Housing Price Index has reported a significant drop in apartment prices in Sweden, with a decrease of 2.6 percent compared to June. This decline, according to Robert Boije, SBAB's chief economist, is "by quite a lot more than normal."
While food prices and transport costs were on the rise, housing costs experienced a notable decline, contributing to the overall inflation dynamics in June and July 2025. This decrease in housing and utilities costs, according to Boije, is primarily responsible for the sharp fall in apartment prices.
The trend of falling apartment prices is particularly notable given the current economic climate. Mortgage interest rates are falling, household incomes are rising, and purchasing power is increasing. However, the drop in apartment prices appears to be an exception to this trend.
Boije attributes this drop to recent increases in the monthly fee or 'avgift' levied by housing cooperatives. This new factor, not mentioned in earlier analyses, seems to be playing a significant role in the decline of apartment prices. Fewer apartments are being sold due to these increased fees, further exacerbating the situation.
Interestingly, the only region where apartment prices rose was in Northern Sweden, with a rise of 2.3 percent. The highest falls were in Greater Gothenburg (4 percent) and Greater Stockholm (3.4 percent).
Contrasting the falling apartment prices, the price of detached houses across Sweden rose by 0.2 percent. However, prices decreased in Greater Stockholm (2.6 percent) and Central Sweden (0.7 percent).
Boije predicts a 3 percent decrease in apartment prices over the whole of 2025. He also suggests that expectations of future increased fees in cooperative housing associations may be contributing to the current drop in apartment prices.
This development in the Swedish housing market comes amid ongoing affordability challenges, particularly in major cities like Stockholm where housing is expensive and waiting times for rental apartments are long. Many people rely on purchasing homes despite the difficulties in saving for down payments, which historically have become harder to accumulate.
In conclusion, the significant fall in apartment prices in Sweden in July 2025, despite other inflation pressures, appears to be a result of the sharper drop in housing and utilities costs, coupled with the increased monthly fees in cooperative housing associations. The trend suggests a remarkable development in the Swedish housing market, with a predicted continued decline in apartment prices for the rest of 2025.
In the light of Boije's prediction, investors might consider refraining from investing in the Swedish real-estate market, particularly in the apartments sector, given the anticipated 3 percent decrease in prices for the remainder of 2025. Moreover, the increased monthly fees, or 'avgift,' in housing cooperatives are influencing the housing-market trends, discouraging potential buyers and contributing to the fall in apartment prices.
