Bloomberg News

Swedish Housing Slowdown Gives Riksbank Room to Delay Tightening

October 17, 2011

Oct. 17 (Bloomberg) -- Swedish house price gains eased in September, giving the central bank more scope to scale back its monetary tightening plans and adapt policy to the fallout of Europe’s deepening debt crisis.

House prices rose 1 percent in the three months through September both from the previous quarter and from a year earlier, Stockholm-based Statistics Sweden said in a statement on its website today. The average price of a one- or two- dwelling building was 2.05 million kronor ($311,639) last quarter, the office said.

Sweden’s Riksbank shelved a cycle of seven rate increases last month, citing a flare-up in global market turmoil and deteriorating recovery prospects in Europe and the U.S. The bank had previously signaled it would need to continue raising interest rates to ward off credit-driven imbalances in the property market. Policy makers have since also scaled back planned rate increases for next year.

“There shouldn’t be any drastic fall” in house prices, Riksbank Deputy Governor Barbro Wickman-Parak told reporters on Oct. 14. “That’s not what we’re counting on.”

The krona gained 0.2 percent against the euro to trade at 0.1314 as of 10:32 a.m. in Stockholm. Versus the dollar, the krona rose 0.3 percent to 6.5739.

--Editors: Tasneem Brogger, Jonas Bergman.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net.

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


Video Game Avenger
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus