Sweden’s housing market — the biggest in Scandinavia — may face correction due to its central bank, Riksbank, deciding to take a hands-off approach, but now price declines are beginning to effect the country’s currency.
According to Bloomberg, there are signs that the ripple-effect of housing markets prices is making Riksbank rethink its approach: in a recent meeting, the bank’s deputy governor Cecilia Skingsley said the housing market “must be carefully monitored,” setting off speculation that Riksbank may be contemplating stepping in with stimulus packages.
Though Nordea analyst Andreas Wallstrom is not holding his breath. He told Bloomberg that home prices will need “a sharp drop” and a case for their clear impact on the country’s economy before the bank gets involved.
[Bloomberg] — E.K. Hudson