The Swedish Mortgages Market - Report September 2020
A brief description of general economic trends is followed by a discussion of developments in housing construction. The first half of 2020 is marked by the outbreak of Covid-19 and the major effects of the pandemic on society and the economy. This shows that after a significant increase in construction until 2017, when the number of housing starts reached the record figures from the beginning of the 1990s, construction has started to slow down in the last years.
Housing prices have been increasing for a number of years. After a drop in housing prices in the autumn of 2017, the prices stabilised at a lower level during 2018 and recovered somewhat in 2019. Housing prices have, despite the uncertainty after the outbreak of Covid-19, continued to increase during the first half of 2020. At the end of June 2020 the price of single-family homes has, on average, increased by 7.3 percent and the price
of tenant-owned apartments has increased by 2.6 percent.
Total residential mortgage lending amounted to SEK 4,569 billion in June 2020. The rate of growth for mortgages was 6.0 percent annually, which is an increase as compared with the same period last year when the growth rate was 5.5 percent. The lending increase to single-family homes was 5.0 percent annually in June 2020 compared to 4.9 percent the same time last year. The rate of lending to tenant-owned apartments is higher than for single-family homes and was 7.1 percent annually at the end of June 2020, which is the same growth rate compared to the same period last year. Mortgage interest rates have generally declined for several years and interest rates are at historically low levels.
Household indebtedness is outlined, as are implemented and proposed measures to counteract high indebtedness. Finally, an overview is provided of the main forms of borrowing for mortgage institutions and information regarding the general easing by Finansinspektionen of the amortisation rules in April 2020 after the outbreak of Covid-19. year.