● THE SWEDISH PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • SPRING 2020
THE SWEDISH PROPERTY MARKET THE STRONGEST TRANSACTION YEAR OF ALL-TIME – BY FAR Though the Swedish economy may be struggling a little, the Swedish real estate market is most certainly not. 2019 saw a record transaction volume of SEK 218 billion – the strongest year of all-time, by far. The previous record year, 2016, had seen a transaction volume of SEK 201 billion, which was eclipsed by almost 10 per cent. As in previous years, average deal sizes continued to rise, with the average deal now being close to SEK 500 million. A number of major M&A transactions as well as major portfolio purchases resulted in a record 42 deals over SEK 1 billion, which drove the rise in the size of the average deal. However, despite this rise, the number of deals over SEK 40 million also rose when compared to 2018, from 433 to 448. Both international and domestic
interest in real estate appears to be at a post-crisis high, as the property market continues to be the high-yielding, low risk choice for all kinds of investors. In 2020, a strong transaction volume of around SEK 200 billion is expected, while in 2021, the market is expected to reach new record highs.
Contact: Alexandra Lövgren alexandra.lovgren@newsec.se Adam Tyrcha, PhD adam.tyrcha@newsec.se
Photo: Serneke
2019 was a relatively weak year for the Swedish economy, with a GDP growth rate of around 1.2 per cent. Despite a slowdown in the economy, the Swedish Riksbank deemed that Sweden was close enough to reaching the inflation goal of 2.0 per cent to warrant an increase in the key interest rate, which resulted in this being increased from -0.25 per cent to 0 per cent just before Christmas. This means that Sweden now does not have a negative key interest rate for the first time since 2015. The SEK strengthened a little as a result, but remains a weakly performing currency. Going into 2020, GDP growth of 0.9 per cent is expected. Further, the economy is expected to continue to grow at a low, but stable rate in the coming years and a recession is deemed highly unlikely.
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