Building blocks starting to crumble
We believe oversupply of newbuilds will hurt Sweden’s residential property market in the next few years, while tightening lending criteria mean more borrowers will hit the credit ceiling. Softening house prices are set to translate into slowing growth in mortgage lending, coinciding with new challengers intensifying competition. We expect margins on mortgages at the Swedish banks to come under pressure, with the risk of a correction in property prices adding to the unfavourable risk/reward. Hence we maintain our negative sector view.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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