Catella index tracks rising risk appetite in Sweden

The Catella Real Estate Debt Indicator (CREDI) tracked an improvement in Sweden's credit market sentiment during the third quarter of 2013.

Compared to the three months to end-June, the CREDI main index moved 4.4 points to a new all-time high of 69.3. Catella said the positive trend was visible in both indices measuring the current situation and expectations.

Following a summer of intense transaction activity in the Swedish real estate market, a majority of both lenders and borrowers indicated that the current financing environment has continued to improve. Expectations for the coming quarter are also upbeat, according to the latest CREDI survey.

'The increasing availability of loan financing has supported liquidity in the Swedish real estate transaction market. Since May we have seen a surge in transactions and it is evident that both banks and investors share a rising appetite for risk on the back of the broader economic recovery,' said Daniel Anderbring, research analyst at Catella.

In the listed property sector average loan-to-value ratios increased 0.8 percentage points to 54.1% in Q2 2013, marking a slight reversal of the deleveraging trend observed since 2009.

'We believe that this is indicative of a shift among the listed companies to invest in growth potential as the availability of financing improves and the general economy recovers,' added Niclas Forsman, capital markets analyst at Catella.