Newsec Property Outlook - Autumn 2020

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●  THE SWEDISH PROPERTY MARKET   NEWSEC PROPERTY OUTLOOK  •  AUTUMN 2020

THE SWEDISH PROPERTY MARKET DESPITE COVID-19 – NEW RECORDS ON THE SWEDISH TRANSACTION MARKET to leave the key interest rate at 0% for the foreseeable future, despite inflation in 2020 likely being close to zero. A strong recovery is expected for the Swedish economy in 2021, with a growth rate of 3.5%, though the strength of the recovery will indirectly depend on epidemiological considerations in Sweden and abroad. Despite the economic outlook, the Swedish real estate market has remained very robust in 2020. The transaction volume in the first six months of 2020 ended up at SEK 81 billion – in line with the historical average, and just SEK 5 billion off the half-year volume seen in 2019, which ended up being the strongest year on record. This was partly driven by the strongest Q1 to date, with a volume of SEK 43 billion, but the Q2 volume

of SEK 38 billion was just 20% off the historically strong Q2 seen in 2019, and stronger than Q2 in e.g. 2018. A number of major transactions have been initiated and completed since covid-19 hit, and international interest in the Swedish real estate market remains considerable. As a result, despite covid-19, a strong transaction volume of around SEK 170 billion is expected in 2020, which will make 2020 the third strongest transaction year of all time – with further highs set to be reached in the years to come.

Contact: Alexandra Lövgren alexandra.lovgren@newsec.se Adam Tyrcha, PhD adam.tyrcha@newsec.se

Photo: Shutterstock

2020 has been far from a normal year, with the covid-19 virus having clear impacts on the Swedish economy. Sweden has not had as severe a lockdown as most other countries, and a result has been that the unemployment rate has risen by under two percentage units to 8.9% – a relatively low increase in global terms. Growth rates from March onwards have also not been as poor as in several other countries, and the expected GDP growth rate in 2020 is around -5%, one of the least negative growth rates in the EU. Still, Sweden will not reap as many benefits of its lack of lockdown as it may seem at first glance, owing to the considerable export dependency of the country. The Swedish Riksbank has unofficially abandoned its inflation goal of 2.0%, at least for the time being, and has stated that they intend

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