Sweden’s Free-Falling Property Market Triggers Worst Economic Slump in EU

Soaring inflation and rising borrowing costs have sent housing prices on a steep downward trajectory across the world, but one of the places where this trend is playing out the fastest is Sweden. After a decades-long property boom fueled by cheap credit, a shortage of housing and interest-only mortgages, the Nordic region’s largest economy is now in the midst of a sharp housing market contraction that threatens to deepen a looming economic slump.

Home prices are down as much as 12% from their peak earlier this year when adjusted for seasonal variations — or as much as 15% in nominal terms. The plunge is happening so quickly that real-world declines could exceed the 20% drop anticipated by forecasters.