Hedge funds have cranked up their bets against Sweden’s real estate sector as investors predict tough times ahead.
Higher interest rates are expected to weigh on domestic property prices and expose its vulnerability to tighter bank lending.
Traders’ worries have intensified after S&P on Monday flagged its concerns over the outlook for SBB, one of the market’s biggest players.
The credit ratings agency cut the Swedish landlord’s rating to junk territory and drew attention to its high leverage and tightening market liquidity.
But investors fear S&P’s doubts are a harbinger for an industry grappling with the impact of rising interest rates and cooling real estate prices.
