The Swedish economy has been hit hard by the coronavirus crisis and this will lead to falling house prices, according to Swedish banking giant Handelsbanken.

While the bank predicts that some sectors of the economy may start their road to recovery later this year, the property market is not expected to get off so lightly.

Handelsbanken predicts that property prices in Sweden will continue falling in the second half of this year, after prices started falling in April (-3.4% for flats and -1.1% for houses).

Overall, the bank predicts that property prices will fall by around 10% in Sweden this year, down from the peak in prices at the start of 2020. But if the crisis is drawn out, they could plummet even further, with the bank stating that if unemployment rises to close to 15% then property prices could fall by 20% from their peak.