(Bloomberg) -- Sweden’s beleaguered real-estate companies may have to resort to fire sales and new share issues as the sector faces risks of rising vacancies and a projected 15% slump in property valuations.

That’s the view of economists at lender Svenska Handelsbanken AB, including Christina Nyman, who said in a sector report that larger commercial landlords in the country could be forced to offload properties under “a more adverse scenario.”

The catalyst for such a scenario would be the industry’s looming “wall of maturities,” according to the economists. While most companies should be able to secure financing through bond markets or banks, as much as a third of maturing bond volumes come from firms that may have to resort to asset sales to refinance. The bank estimates as much as 120 billion kronor ($11.1 billion) of bonds fall due in each of the next three years.

Read More: Why Sweden’s $41 Billion of Property Debt Is Alarming Europe

The development in the sector has raised the specter of a crisis similar to the one Sweden experienced in the 1990s, when a property market crash reverberated throughout the Nordic nation’s financial system. In a separate report published Wednesday, the country’s central bank spelled out a worst-case scenario in which developments in the property sector could threaten stability.

If falling property values make real-estate owners breach financial covenants, lenders may request additional collateral, which can “quickly create a negative spiral,” the Riksbank said. Widespread property sales could cause a further plunge in values, force loan losses at lenders, and create “a significant risk” that problems spread within the financial system.

In contrast, Handelsbanken’s economists still see little chance of more far-reaching effects from the current funding squeeze.

“At a fundamental level, we don’t see anything wrong with the companies, which means that we don’t expect the commercial property sector to derail the economy,” the report noted.

The jump in borrowing costs is also pressuring the residential housing market where Swedish home prices have declined steadily since March. Handelsbanken -- among the biggest mortgage lenders in the country -- now expects the drop to continue, reaching 19% from the peak, which is a deeper slump than the 15% it had previously forecast.

“We estimate that housing prices so far have dropped by about half of the forecast decline, and that they won’t stabilize until spring 2023, when inflation turns lower,” the bank said. “After that, we expect very modest price increases, and with interest rates remaining at higher levels there is no tailwind in sight for housing prices in the foreseeable future.”

--With assistance from Ott Ummelas.

(Adds Riksbank warning on financial stability from fourth paragraph.)

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