December 8, 2021

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Brokers tops predict a drop in new home prices - E24

Brokers tops predict a drop in new home prices – E24

October was the usual autumn month in the Norwegian housing market, I think peaks in DNB Eiendom and Privatmegleren. Wednesday’s results are expected to show the seventh drop in prices in Oslo in the past eight months.

Grethe Meier at Privatmegleren believed there would be a steep price drop in 2021.

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Grethe Meier, CEO of Privatmegleren, expects the used-home market to continue to cool after scorching temperatures last year.

On Wednesday, Eiendom Norge presents new numbers for October. In the previous month, prices fell 0.9 percent nationwide. This corresponds to a slight increase when correcting for seasonal changes.

Autumn usually brings home prices down. In this sense, it is a very normal market that brokerage firms are now reporting on.

The market looks healthy and is on its way back to normal. Mayer says the price development in October is likely to be slightly weaker than the previous month.

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Don’t totally agree up or down

Rival Terry Borras, general manager of DNB Eiendom, agrees. Their portfolio is showing a decline of about one percent in October, and they expect a slightly seasonally adjusted decline to the downside.

But at brokerage DNB Markets, chief economist Kjersti Haugland expects a modest, seasonally adjusted 0.2 percent increase.

The Norwegian housing market has largely calmed down after being overheated during the first year of the Corona crisis. Now the first rate hike has come, and there’s more to come. I wrote in an email that with another rate hike in the future, house prices may flatten out.

While DNB Eiendom expects a slightly seasonally adjusted decline, Kjersti Haugland at DNB Markets believes home prices rose slightly in October.

Lower price than expected

Especially in Oslo, housing prices rose last year. But in the past six months, Eiendom Norge has reported a decrease in the capital for all but one month.

Grethe Meier expects the trend to continue.

– But the decline this year does not look as strong as I previously thought. I thought we might get a big drop because the market usually corrects itself after years of high inflation, plus interest rates start to rise. But Norwegians have high purchasing power on average, and I think we’ll be spending more on housing in the next time.

After all signs of the sun, Norges Bank will raise interest rates again in December, and will likely continue to increase by 0.25 per cent every three months next year. DNB Eiendom sees no direct impact of this on the housing market.

– It looks as if the Norges Bank has clearly directed this to upfront interest rate increases, so the increase shouldn’t come as a surprise to homebuyers. We believe this will contribute to a soft landing in the housing market, in order to avoid major corrections or bubble trends in the future, writes Terry Borras.

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– The best market for skilled brokers

DNB Eiendom figures show that activity in the housing market is now 15 and 10 per cent lower than in 2020 and 2019, respectively.

Many psychics actually believe that a little less impact has its advantages as well, according to Grethe Meier.

– Last year, brokers were almost pure real estate brokers, due to such fierce demand. Then the brokers could not show their craft, and there was great demand. So right now, the market is really on top for skilled brokers, she says.

Selling a home still takes a while, notes Terry Porras, director of DNB Eiendom.

What is put on the market is sold, and on average it takes about a month to sell a house. This is in contrast to the fact that activity is less and prices are dropping, so we can safely say that we have a somewhat unusual housing market at the moment.

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