House prices could keep falling into the summer, she added, and Swedbank forecasts that interest rates will rise to 3.75 percent in June and stay there for a while.

Erik Selin, the founder of Fastighets AB Balder, a large property development company based in Goteborg, Sweden’s second-largest city, dismisses the idea that the current downturn is a crisis. He began investing in real estate in 1992, when he was 24. His company now has more than 1,800 properties, mostly in Sweden, Finland and Norway, and many are apartment blocks.

“If you have a crisis or a downturn, the perception is that the risk is high,” he said. “And when everything is good, the perception is that the risk is low, but it’s actually the other way around. You should really be scared when everybody thinks things are good.”

Accordingly, he’s not scared, despite an 11 percent drop in apartment prices across Sweden over the past year. A drop of another 5 or 10 percent would not be “that dramatic,” Mr. Selin said, because underlying demand for housing in cities is strong.

But these days, it’s not business as usual. His company has put off starting new developments because of the combination of higher construction costs, falling property prices and higher interest rates.

“It didn’t make sense to invest a lot in construction,” Mr. Selin said. “We haven’t started anything new for roughly a year, maybe even more. That’s a big change.”

When will they restart?

“Its extremely hard to know,” he said.

Christina Anderson contributed research and reporting from Stockholm and Bastad, Sweden.