Single-family house prices fell by 5% in Sweden due to soaring inflation in Q4 2022

Posted on January 20, 2023   |  

Swedish house prices fell by 5% in Q4 2022 compared with the previous 3 months as a downturn in real estate prices worsened cost-of-living for heavily indebted households.

Prices of single-family homes plunged this year due to high inflation and repeated big rate hikes by the Swedish Central Bank, breaking a decades-long boom in real estate prices that increased household debts to the highest levels in Europe.

The inflation is running at 30-year highs, pressuring households and decreasing consumer spending, pushing down residential construction and crimping economic growth.

Home prices are expected to fall 20% from a record high in early 2022 and only bottom out around mid-year and the Swedish GDP is likely to decline 2% in 2023.