Sweden’s Worst Housing Slump Since 2008 Is Ripe for Sanity Check

Sweden is in the worst housing-market downturn since the global financial crisis. But with bigger bank buffers and an economy that’s growing much faster than the rest of Europe, analysts, regulators and politicians all say everything will be just fine.

First, there’s the reason behind the price correction. It’s not caused by economic or financial distress, but by a surge in construction (initially to meet excess demand). Sweden is now a buyers’ market, with construction at its highest since the 1990s. The economy is growing much faster than most of the rest of Europe, with high confidence levels, strong government finances and declining unemployment.