Households remain optimistic on the housing market

SEB HOUSING PRICE INDICATOR CONTINUES TO SIGNAL RISING PRICES. SEB’s Housing Price Indicator
declined marginally in October to 50 (Sep 51), but remains near the highest levels since July 2007. Hence, improving labour market, rising equity prices and promises of tax cuts next year continues to fuel household optimism in Sweden. According to the survey 62% of the responding households (Sep 61%) expect house prices to rise, while 12% (Sep 10%) expect prices to fall. 18% (Sep 20%) expect unchanged prices. Households in Stockholm remain the most optimistic; illustrating that overheated housing market is an issue for large metropolitan areas, and especially the capital. While the Housing Price Indicator indicates a continued rising trend for home prices, we believe that regulatory measures will at least partly offset the positive impact from e.g. low rates and an improving economy.

MONDAY 7 OCT, 2013

proposal for countercyclical capital buffers. Although the aim for this regulation is primarily to strengthen the resilience of banks to future crisis it could also be expected to affect lending. The FSA head, Martin Andersson, has warned that too rapid lending would be met by strict amortisation demands. However, last week Andersson said there is no sign that such actions are warranted at present. The comment came after new data showed lending growth stable at 4.8%in August. Previous experience indicates that voluntary actions could be effective. For instance, 9 out of 10 households are now amortising loans above 75% loan-to-value in line with the recommendations from the Swedish Bankers Association.

NEW MEASURES TO DAMPEN LENDING. Next week, the Financial Supervisory Authority is due to present a proposal for how to increase amortisation. The aim is a regulation for banks to draw up individual but voluntary amortisation plans for new lending (or when increasing loans to existing clients). The plans should according to the guidelines from the government state both why the plan is in the long-term interest of the client and how the client is relating to the plan. Next summer, by the latest, the FSA is also due to present a

Elisabet Kopelman +46 8 506 230 17

Since March 2003 we’ve contracted Demoskop to survey the Swedish housing market every month. This survey was conducted 24 Sep – 2 Oct, 2013. SEB's Housing Price Indicator
80 60 40 20 0 -20 -40 -60 -80
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: SEB, Demoskop

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You can also find our research materials at our website: www.mb.seb.se. This report is produced by Skandinaviska Enskilda Banken AB (publ) for institutional investors only. Information and opinions contained within this document are given in good faith and are based on sources believed to be reliable, we do not represent that they are accurate or complete. No liability is accepted for any direct or consequential loss resulting from reliance on this document. Changes may be made to opinions or information contained herein without notice.

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