(Bloomberg) -- Swedish home prices have resumed a slide that’s kept the Nordic country in the spotlight over havoc wreaked by rising borrowing costs.

The prices of apartments as well as detached houses fell by 1% from the prior month in November, according to data published by Svensk Maklarstatistik on Friday. The report confirms that the market has weakened again, following a period of stabilization this year.

When central banks worldwide started raising rates in 2022, Sweden’s housing market suffered one of the worst routs globally. Mortgage rates that are typically fixed on short terms made its households sensitive to tightening, and prices were ripe for a correction following out-sized gains during the Covid-19 pandemic. 

Swedish housing prices remain vulnerable as the country’s economy contracts and two years of inflation above target has taken a toll on households’ spending power. Providing some relief, economists believe the central bank is now done increasing borrowing costs after it held its benchmark rate at 4% last month. 

The data from Maklarstatistik, which is owned by the Association of Swedish Real Estate Agents, shows that the average price of detached houses is back at the level it was in December last year. It puts the total drop at 14%, while apartment prices have shed about 10% since the beginning of 2022.   

In a report published last month, economists at Swedbank AB said they expect prices to continue declining until some time in the first half of next year. Swedbank forecast that overall housing prices will fall about 15% from peak to trough, with prices for single-family houses generally falling more than for apartments. 

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The price drop, combined with rising costs for building companies, has also led to a sharp slowdown in housing construction, which is weighing heavily on economic output. Most forecasters expect the largest Nordic country to see its economy shrink this year as well as next, and the European Commission believes that Sweden will be the only member state to see activity decline in 2024.  

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