Updated
Stockholm Apartment Prices HOX OMX Valueguard
The Stockholm Housing OMXNORDIC:HOXFLATSTO market has suffered it's first major correction in over 10 years.
The fundamental question is is it over?
Either price will recover to take out the high set in in July 2017 or it may form what pattern traders describe as a head and shoulders which could complete at around the 61.80 % retrace.
This diagram must also be read in relation to a much larger house price trend in Sweden dating back to the 1980's - more to follow.
Many news and institutional bodies have pointed to the introduction of a new amortisation requirement in March 2018 as the reason for a decline.
However if you were trading apartments as a stock asset:
A. you would know from the parabolic nature of this chart OMXNORDIC:HOXFLATSTO that the asset is overpriced and therefore an entry into the market would be a high risk trade - until a correction took place.
B. If the RSI (Relative Strength Indicator) can be applied in this market - it showed highly overbought conditions and Bearish divergence dating back to 2015 - and a trend reversal was most likely.
C. You would wait for an appropriate entry - as opposed to getting involved with retail investors who pumped price up without imagining the asset might drop.
D. Have been aware that high levels of leveraging were being used by retail investors facilitated by the banks to pump price up - in order to ensure their exposure to developers was minimised.
E. That Retail investors had engaged in the entering of contracts of difference - where they double mortgaged in order to purchase a new asset while not having sold there old asset - hoping that the price of their old asset would go up before it was sold to the market and would therefore cover their over priced second asset.
F. Additional signs of an impending Bear market: Current market speculation by the Swedish Banks who are reducing their mortgage rates to attract new customers to the books in order to maintain some action, and to reduce risk of their loans to institutional borrowers in the asset class and to cover their overstretched loans to retail investors who got caught up in unsustainable market movement.
As such one can discuss that the latest amortisation requirement: fi.se/en/published/news/2017/proposal-for-a-stricter-amortisation-requirement-for-households-with-high-loan-to-income-ratios/ : which most news outlets, institutions and biased actors such as developers and marginal political players deem to be responsible for the price reversal, is in fact a distraction and a correction would have most likely taken place anyway.
A trader would know News follows Price.
A trader might ask what is the distraction designed to cover up?
The answer is almost always deeper economic problems that the power structure including the government, the developers and banks don't want to talk about.
Stockholm apartment market OMXNORDIC:HOXFLATSTO outlook: Bearish - with a potential for a light relief rally.
The fundamental question is is it over?
Either price will recover to take out the high set in in July 2017 or it may form what pattern traders describe as a head and shoulders which could complete at around the 61.80 % retrace.
This diagram must also be read in relation to a much larger house price trend in Sweden dating back to the 1980's - more to follow.
Many news and institutional bodies have pointed to the introduction of a new amortisation requirement in March 2018 as the reason for a decline.
However if you were trading apartments as a stock asset:
A. you would know from the parabolic nature of this chart OMXNORDIC:HOXFLATSTO that the asset is overpriced and therefore an entry into the market would be a high risk trade - until a correction took place.
B. If the RSI (Relative Strength Indicator) can be applied in this market - it showed highly overbought conditions and Bearish divergence dating back to 2015 - and a trend reversal was most likely.
C. You would wait for an appropriate entry - as opposed to getting involved with retail investors who pumped price up without imagining the asset might drop.
D. Have been aware that high levels of leveraging were being used by retail investors facilitated by the banks to pump price up - in order to ensure their exposure to developers was minimised.
E. That Retail investors had engaged in the entering of contracts of difference - where they double mortgaged in order to purchase a new asset while not having sold there old asset - hoping that the price of their old asset would go up before it was sold to the market and would therefore cover their over priced second asset.
F. Additional signs of an impending Bear market: Current market speculation by the Swedish Banks who are reducing their mortgage rates to attract new customers to the books in order to maintain some action, and to reduce risk of their loans to institutional borrowers in the asset class and to cover their overstretched loans to retail investors who got caught up in unsustainable market movement.
As such one can discuss that the latest amortisation requirement: fi.se/en/published/news/2017/proposal-for-a-stricter-amortisation-requirement-for-households-with-high-loan-to-income-ratios/ : which most news outlets, institutions and biased actors such as developers and marginal political players deem to be responsible for the price reversal, is in fact a distraction and a correction would have most likely taken place anyway.
A trader would know News follows Price.
A trader might ask what is the distraction designed to cover up?
The answer is almost always deeper economic problems that the power structure including the government, the developers and banks don't want to talk about.
Stockholm apartment market OMXNORDIC:HOXFLATSTO outlook: Bearish - with a potential for a light relief rally.
Note
Real Estate brokerage fraud has risen dramatically in Sweden - with Stockholm being the worst effected.svd.se/rekordmanga-maklare-anmals--stockholm-varst
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