SBB, landlord with public property, at centre of fallout
Minister says ready to act if more 39;accidents39;
Swedish house prices drop by a fifth

STOCKHOLMFRANKFURT, June 16 Reuters Sweden39;s government is ready to step in to stem the fallout from a property rout if tumbling prices cause a wider crisis a potential harbinger of trouble across Europe.

High debts, rising interest rates and a wilting economy has produced a toxic cocktail for Sweden39;s commercial property companies, with several cut to junk by rating agencies.

House prices are also down by around onefifth since their March 2022 peak, according to the Organisation for Economic Cooperation and Development OECD, reflecting soaring mortgage costs.

Swedish Financial Markets Minister Niklas Wykman told Reuters the state has the financial clout to prevent a property market plunge from engulfing the country, one of Europe39;s wealthiest, and its banks.

There is a preparedness to act, he said.

If … more accidents happen … or … new risks are revealed … or threats to the financial system arise, then the most important thing from a stability perspective is to have a broad tool box … which the state can use.

Concerns about the property sector are already weighing on the currency, while investors are wondering if Sweden is only the first domino to fall in Europe.

Sweden and Germany are among the worst affected by a widening property slump on the continent, according to Eurostat.

Earlier this week,…