The Investment Property Databank (IPD) has said that total returns in its 2007 Swedish Residential Property Index posted a massive 5.7% drop in 2007, falling to 9.4% from 15.1% in 2006. The index underperformed the commercial property market, which returned 14.9% for the year, but outperformed Equities and Bonds in 2007, which returned -3.5% and 1.6% respectively. The 2007 total return was driven by capital growth of 6.3% and an all time low income return of 2.9%.
The Investment Property Databank (IPD) has said that total returns in its 2007 Swedish Residential Property Index posted a massive 5.7% drop in 2007, falling to 9.4% from 15.1% in 2006. The index underperformed the commercial property market, which returned 14.9% for the year, but outperformed Equities and Bonds in 2007, which returned -3.5% and 1.6% respectively. The 2007 total return was driven by capital growth of 6.3% and an all time low income return of 2.9%.
'The residential sector showed the weakest total returns in 2007 of all property sectors. With the lowest income return of all the sectors of 2.9%, residential properties have been most affected by the rising interest rates', said Christina Gustafsson, managing director of IPD's services in the Nordic region.
The total value of the 2,975 properties covered by the IPD residential databank is SEK 183bn (EUR 19.6bn).
