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Sweden’s Economic Recovery Bolstered by Record High Home Prices

Sweden’s Economic Recovery Bolstered by Record High Home Prices

Swedish residential property prices hit a record high in July, giving a further boost to an economy that continues to navigate its way through the coronavirus pandemic.

Home prices rose 2.0% on the month in July and 7.9% compared to last year, according to the Nasdaq OMX Valueguard-KTH Housing Index, HOX Sweden.

“This is likely an effect of more people than usual that vacationed at home during the summer, as well as fewer houses for sale,” Swedbank’s Maria Wallin Fredholm said in a note. The economist also cited low mortgage rates and a strong recovery in the stock market as further supports.

“We expect that home prices will continue to show stabilization and increase slightly during the fall, which is important for the recovery in the domestic economy,” Nordea’s Susanne Spector said in a note.

The rise in property prices coincides with an improving outlook for Scandinavia’s biggest economy, which looks set to dodge the double-digit recessions facing some other parts of the world amid Covid-19 restrictions.

Sweden opted against a full lockdown, triggering considerable debate both outside and in the country. Though its economy appears to have been spared the worst, Sweden’s Covid-19 death rate is much higher than elsewhere in the Nordic region.

Read More: Sweden Now Faces Milder Recession Amid Contested Covid Plan

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