Due to the critical significance of housing wealth for both the households and aggregate economy, the impact of changes in housing wealth on consumption has received considerable attentions in the literature. A number of prior studies have suggested that variations in housing wealth have substantial impacts on consumption and tend to be much larger than equivalent variations in financial wealth. However, there is little empirical analysis of this issue within the Sweden context. Swedish housing market has some peculiar characteristics that favourable to the investigation of housing wealth effects. The housing equity is widely held by households and the distribution is fairly even. Further, the rent level in Sweden is highly regulated so that the homeowners are easier to capitalize gains in the private owner-occupied housing market. In this paper, we test the wealth effects of housing on consumption using the Sweden quarterly data ranging from 1981K1 to 2004K4. A key concern in our paper is how the volatility of price movement affects the levels and timing of wealth effects of housing. We also investigate whether the financial deregulation and the reform of housing finance system yield structural changes in the wealth effects of housing.