November 22, 2024 08:01 GMT
SWEDEN: Small Uptick In Housing Starts Versus A Year Ago But Outlook Still Weak
SWEDEN
Preliminary Q3 residential construction data suggests the housing market remains weak from a supply perspective, a notion backed up by recent sentiment readings and the Riksbank's September Business Survey. The Riksbank’s policy rate cuts should provide a more conducive environment for construction investment into 2025, but this will also require improved household demand.
- Swedish housing starts rose by 4,000 in the third quarter, with 2,700 multi-dwelling (i.e. apartment) starts and 1,300 one- or two-dwelling building starts. Year-to-date housing starts have increased by 19,600.
- However, for the purpose of comparison with a year ago, Statistics Sweden adjusts the 2024 figures 10% higher, “which is the reporting lag for the corresponding period in the past year”. Compared to the first three quarters of 2023, overall starts were up 5%, though this reflected an 18% fall in one- or two-dwelling starts and a 12% rise in multi-dwelling starts.
- There were 5,600 total completions in Q3, the lowest since Q3 2014. The 4-Q rolling sum of completions fell to 44,800 from 53,600 last quarter, reflecting the sharp pullback in starts as the Riksbank began its hiking cycle in 2022.
- Sentiment amongst constructors remains weak, with the latest Economic Tendency Indicator for the Construction of buildings falling to 91.2 (vs 92.0 prior), well below the 2000-2019 average of 102.6.
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