Wednesday, 12 December 2007
Swedish Price Collapse and Tapiola Group
"The Swedish E24, an online economical site told on Monday that apartments prices in Stockholm have fallen8-9 per cent in the last three months ." reported Kauppalehti.
"The stock of apartments on sale will probably not increase significantly, so average price will stay at around the same level. Do not be afraid of a price collapse." said Isa Immonen, from Tapiola group.
First I'm not surprised to see price starting to come off their historical high. Finland will follow with a high probability next year as rising stocks, lengthening of sales and plummeting affordability will dent the housing market.
Second UK prices are dropping at a pretty fast rate, at a time when we have a record low level of unemployment (Unemployment Drops to the Lowest Since 1975, reported Bloomberg). So even the best news can't keep the housing price from rising or even stabilizing them.
Last, I would like to remind that The Tapiola Group has been pretty poor in predicting either interest rates or housing price evolution. As I recall in June 2007 : "(The US) FED is More Likely to Raise than Reduce Interest Rates", as we know ,the opposite happened. Of course now they are predicting interest rates to come down to 3.5% where most economists are betting for stable 4% for 2008 if not higher if the credit crisis come down and German inflation start to bite...
Source: e24, Kauppalehti
Related: Sweden price down, Finland Next? , The great prophet of the past