(Bloomberg) -- Home sales and housing starts by Swedish property developers tumbled at the end of 2017 amid the biggest drop in prices since 2008.
JM AB, Skanska AB and Bonava AB’s combined housing starts in Sweden fell 28 percent to 1,898 in the three months through December from the same period a year earlier, their fourth-quarter reports showed. Oscar Properties AB, a developer of luxury apartments mainly in Stockholm, didn’t start any.
At the same time, the four firms’ combined Swedish home sales slumped 42 percent to 1,330 in the quarter. At JM, the decline was 33 percent, driven by a 51 percent drop in Stockholm. At Oscar Properties, the decline was 85 percent.
After years of booming prices, fueled by a shortage of housing and low interest rates, Swedish home prices dropped 7.8 percent in the three months through December after an increase in construction pushed supply too high at a time when households started becoming more pessimistic about the outlook for the market. High-end apartments in Stockholm have been particularly hard hit.
"The housing market in Stockholm continued to be cautious," JM said. "Customers are continuing to show strong interest in our projects, but are taking a cautious approach to signing contracts early in the process."
The company’s total housing starts in Sweden have now dropped for three consecutive quarters, driven by a slowdown in the capital.
At Oscar Properties, the number of homes sold dropped to the lowest level since the second quarter of 2015 after what it described as a "tough autumn."
©2018 Bloomberg L.P.