Analysis: Here's the hangover from the historically low interest rate

Grand Hotel in Stockholm.

Under the chandeliers in the Winter Garden, the new Riksbank governor speaks to an audience of real estate developers who have gathered for a full day about the state of the housing market at a time in history when they might as well have skipped all program items and gone straight to the grave beer.

For now, housing construction is slowing down.

Now housing prices are falling.

Now we have the hangover that finally came after a historically low interest rate for so long that a whole generation had time to get used to cheap money and ever-rising housing prices.

The theme: More numbers on the way

Governor of the Riksbank Erik Thedéen comes to the point in his speech that everyone has been waiting for: what does he say about the latest inflation figure?

The one that sent shockwaves through economists on Monday?

Yes, he probably also thinks it points in the wrong direction.

But, "there will be more numbers before April", when the Riksbank will come out with its next interest rate statement, and afterwards he tells us journalists that it is out of the question that they would come up with an additional interest rate increase before then.

The big question right now is why inflation is not catching up.

Even though energy prices have fallen.

Although you can no longer blame "pandemic effects".

Why are the price increases now spreading as if they had a life of their own?

Is it greedy companies that are at fault?

Manufacturers and traders who take the opportunity to improve their profit margins through price increases, despite the fact that they themselves have not been hit so hard by the higher electricity price?

"Isn't a crash"

Erik Thedéen tells SVT Nyheter that there is a possible explanation, and urges consumers to become better bargain hunters.

- Our hope is that households are tougher price negotiators.

That they do not accept the highest prices but go to those who offer slightly lower prices.

Then we get a process in the food trade that dampens those butter or roll prices that we are talking about.

As for the topic of the day, on "Housing Day 2023", Erik Thedéen does not think that the recent price drop in the housing market is worrying.

- A drop of 20 percent over two years is not a crash, after prices have risen as much as they have.

The question is whether it stops there, and whether it takes as long as two years before prices fall back 20 percent.

We are almost there already, if you include all the homes that have not yet been sold because the sellers do not accept the new price picture.

Perhaps best for everyone in the housing market to also skip the beer and go straight to the hangover tablet.