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The Swedish mortgage market (Q1, 2020)

COVID-19 yet to affect mortgage lending
As of the end of March, the impacts of COVID-19 were difficult to see in the Swedish residential mortgage market. Mortgage loans increased by SEK 18bn during the month of March, an increase from SEK 11bn during March 2019.

The likely explanation is that the Swedish housing market had a strong start to the year.  Through the first three months of 2020, Swedish housing prices had risen by 3.7%, surpassing previous peak price levels from the fall of 2017.

The chart below shows market shares for the Swedish housing market in total and over the last 3, 6, 12 and 24 months. You can select the fields to display and switch between the entire market, flats and houses by clicking on the chart.

SwedbankSHBSEBNordeaSBABLF BankDanskeSkandiabankenSp SkåneSp NordSp SjuhäradLandshypotekRekarneVarbergs SpNordnetSörmlandsWestra WermlandFalkenbergs SpSp AlingsåsÖlandsSp LidköpingOther banks05101520
Market shareLast 3 monthsLast 6 monthsLast 12 monthsLast 24 monthsResidential mortgage: market shares through Mar 2020 (%)Market share (%)Source: Statistics Sweden, Nordic Credit Rating.Residential mortgageSingle-family housesFlats

Handelsbanken maintains top position to begin 2020
The Swedish mortgage market has historically been dominated by Swedbank and Handelsbanken which together have 46% of the market. Thru the first three months of 2020, Handelsbanken had the higher share of the overall market with 15.2%, compared to its 22.1% total market share for Swedish mortgages. Swedbank's market share shows signs of stabilising with its 11% share in 2020, as well as over the last 12 months.

The most formidable challengers to the two market leaders during the first quarter were again SEB and Nordea with a combined 26% share. Danske Bank had a noteworthy increase in market shares during the first quarter, capturing 8.7% of the market compared to its 3.8% overall share.

As has been the case in recent quarters, unnamed banks (as per Statistics Sweden data) continue to add market share, capturing 11.8% of the market in the first quarter, up from 2.6% overall share. The increase is 13.2% for single-family housing (SFH) and 10.0% for mortgages to flats. Savings banks (as defined by Statistics Sweden) are a component of this growth, attracting 4.3% of the marginal market compared to 2.1% overall market share.

In the SFH market, SEB took home the largest share of the market during the first quarter with 14.9%, continuing to exceed its 13.6% overall share with similar shares as it has maintained for the last year. Thus far in 2020, Danske Bank has had the largest increase in marginal shares (8.2%) compared to overall SFH share (3.3%).

TotalHousesFlats05101520
10 years5 years3 years1 year6 months3 monthsCumulative average growth rate of Swedishhousing price indices through Mar 2020 (Sweden)CAGR (%)Source: ValueGuard HOX Index, Nordic Credit Rating.SwedenStockholmGöteborgMalmöCollege Towns

Handelsbanken has maintained its top position in lending to flats in 2020, with 19.8% of the market during the first quarter. Nordea (15.2%) and Danske Bank (9.4%) were the other major banks to increase their market shares in this area in the first quarter.

Housing price reach all-time highs prior to covid-19 effects
Valueguard's HOX index reached its all-time high in February 2020 before falling slightly during March. NCR anticipates that Sweden's house prices will fall during 2020 as a side effect of the COVID-19 response, although the magnitude of the decline is difficult to predict. Over the last 12 months national housing prices increased 5.8%, compared to 5.3% annually over the last 10 years).  For SFHs, the 12-month growth (6.0% vs 4.9%), while for flats growth has been moderate over the same period (5.6% vs 6.4%). Significant gains during the first quarter can be seen in the CAGRs for Sweden's SFHs in total, as well as for Stockholm, Malmö and mid-size college towns.

The chart to the left shows the cumulative average growth rate (CAGR) for Sweden and its major cities. Change the market by selecting from the options on the right-hand side of the graph to see the CAGR over a variety of periods. NCR intends to update this interactive information quarterly.

The analysis of the Swedish mortgage market from Q4, 2019, is available here.