SEBs house price indicator at highest level in 10 months

ANOTHER LARGE INCREASE IN SEBS HOUSING PRICE INDICATOR. Swedish households again believe in rising house prices. Aprils housing price indicator increases to +15 (cf. +1), the highest level since June last year. In detail, 41% (cf. 34%) of respondents expect prices to increase while 26% (cf. 33%) expect prices to decrease. 26% (cf. 28%) expect prices to stay unchanged. OPTIMISM IN ALL REGIONS. For the first time since June, all regions indicators are back at positive levels although there are still large division between regions. Households belief in higher house prices is currently the most wide-spread in Stockholm. Throughout the crisis, the southernmost part of Sweden, including Malm, has been the most pessimistic region, but this is where we see the largest shift in attitude in April; from -11 up to +11. The higher expectations are probably partly driven by the Riksbanks two repo rate cuts, but the improved economic sentiment and higher stock markets also matter. The probability of further rate cuts has decreased, especially since Riksbank board members Ingves and Jansson have admitted weighing the housing market and credit growth into their decisions.

TUESDAY 10 MARCH, 2012

SEB's Regional Housing Price Indicator

30 25 20 15 10 5 0

SWest

Stockholm

South

Note: Southwest incl. Gothenburg & South incl. Malm but Mid excl. Stockholm.

UNCHANGED REPO RATE EXPECTED. In line with the Riksbanks repo rate path, respondents do not expect any large shifts in the repo rate. On average, the repo rate is expected at 1.57% in one years time (cf. 1.54%). We still forecast a repo rate at 1.00%, but agree that the probability for further cuts has decreased, with signs of stabilisation in the Euro-zone resulting in strong gains in Swedish sentiment indicators the last months. The share of respondents planning to fix rates within the next three months was unchanged at 6%.
Sanna Eckardt, +46 8 506 230 54

Since March 2003 weve contracted Demoskop to survey the Swedish housing market every month. This survey was conducted Mar 29 Apr 4.

SEB's Housing Price Indicator

80 60 40 15 20 0 -20 -40

Percentage of floating rate holders planning to fix rates within 3 months

25% 20% 15% 10% 6% 5%

-60 -80
03/03 01/04 11/04 09/05 07/06 04/07 02/08 12/08 10/09 08/10 06/11 04/12
Source: SEB, Demoskop

0%
02/03 01/04 11/04 10/05 09/06 08/07 06/08 05/09 04/10 02/11 01/12
Source: SEB, Demoskop

Northern

You can also find our research materials at our website: www.mb.seb.se. This report is produced by Skandinaviska Enskilda Banken AB (publ) for institutional investors only. Information and opinions contained within this document are given in good faith and are based on sources believed to be reliable, we do not represent that they are accurate or complete. No liability is accepted for any direct or consequential loss resulting from reliance on this document. Changes may be made to opinions or information contained herein without notice.

SEast

Mid