Published 15 March 2023 at 07.49
Economy. Household consumption has been kept up – in kroner terms – and now the Riksbank is expected to raise the interest rate by another 1.25 percent, which will have repercussions on the housing market. That's what Handelsbanken's analysts write in an analysis.
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After a pause in the housing price fall in January, the decline is now upon us, according to Handelsbanken's analysis.
“We foresee further interest rate increases, which increases the pressure on indebted households. We interpret current inflation signals as the risk of inflation getting stuck at too high a level has increased, and we have revised our view of how the Riksbank and other central banks will act”, writes the banking giant.
“Our forecast is that the Riksbank will raise the key interest rate by a further 1.25 percentage points in the first half of this year, up to 4.25 per cent. We judge this to be compatible with the banks' variable mortgage interest rates after the discount will rise to just under 5.5 percent at the end of the year.”
The increased interest expenses and continued high inflation, Handelsbanken believes, will contribute to households eventually cutting back on consumption and housing prices falling further already under spring.
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