We expect house prices to fall in Sweden and Norway this year as rising interest rates push up borrowing costs. But the peak-to-trough declines are likely to be smaller than those in Canada, Australia, and New Zealand, where house price-to-income ratios have risen more quickly since early 2000. The main event next week will be the SNB announcement on Thursday at which the SNB is likely keep its policy settings unchanged once again. But with the ECB set to hike in July, an unscheduled rate hike by the SNB between the June and September meetings now seems the most likely outcome.
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