New mortgage loan fund targets institutional investors in Sweden

Jonathan Boyd
clock • 2 min read

The founders of a platform intended to aggregate the purchasing power of mortgagors is set to release a fund into the Swedish market, which institutional investors such as insurance companies and pension funds can invest in, and which will facilitate access to residential mortgages, according to Dagens Industri.

The Swedish business daily reports that the founders of Hypoteket, Carl Johan Nordquist and Dag Wardaeus, claim they have all the necessary regulatory approval to push forward on the idea, and that they will be seeking to release the product after the summer.

DI adds that the idea came from the Netherlands, where similar products mean pension funds have taken some 12% of the local residential mortgage market, and the share traditionally accounted for by the big banks has fallen to below 50%.

DI also notes that last year media group Schibsted invested in the company, then called Bolånegruppen, obtaining a minority stake; the newspaper notes that this means Hypoteket joins Mittbolån, Lendo and Compricer in Schibsted’s fintech portfolio.

Property price fall

Meanwhile, in related news housing market data provider Valuegard said that residential property prices fell across most key local markets in Sweden in the past month.

The NASDAQ OMX Valueguard-KTH Housing Index (HOX) Sweden fell -0.5% on average across the country over the past month, according to data published on 14 July.

The monthly reversal in the market still leaves the overall index up 9.7% on a 12-month basis, however, certain classes of housing such as flats in Stockholm, Gothenburg and Malmoe have been losing value for the past three months.

There have been warnings that Sweden’s housing market is heading for a correction. The HOX index stood at 100 in 2006 and now is now at 239. The Riksbank repo rate stands at -0.5% as of 5 July, despite the central bank stating following its latest interest rate decision taken on 3 July, that the country’s economy is strong and inflation is nearing 2%. The bank added, however, that it did not see any rises in its rates taking place before mid-2018.

 

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