"Swedes believe in higher house prices"
I have updated the chart that I have produced for a couple of years now, an overlay of real swedish house prices on top of the famous chart from professor Schiller of american real house prices.
What is striking is how swedish house prices have followed american house prices with some added volatility. It is also striking that while american house prices seem to have bottomed (not very well illustrated by this chart since for american prices, it ends 2011), the economy seems to find new traction even in the industrial sector, where wages are much more competitive than in Sweden, where companies also now have the artificially highly valued swedish krona to handle.
The swedish krona is a major short for me at these levels. The previous years success of the swedish economy is based on a housing bubble, nothing else, as illustrated in this chart. Government debt levels will rise quickly as the wellfare system kicks in to compensate newly laid off people as well as eventually bailing out home owners/banks.
The swedish price series is based on the "Residential houses for permanent living" or "Småhus för permanentboende" price series deflated by the main consumer price index.
Husbubbla, Fastighetsbubbla, Sverige.
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