On Tuesday, the Home Builders Association provided numbers on the sale and start of new homes for the month of August. New home sales in August 2021 are down 24 percent from August 2020.
The decline in new home sales should be seen in connection with the sharp rise in the prices of building materials and especially wood which has had a disturbing price development, says Per Jaeger, CEO of Boligprodusentenes Forening.
The Home Builders Association will now study what it takes to increase competition in the market and take a closer look at the possibilities of using the same dimensions of timber as the rest of Europe.
Jæger notes that the supplier market has paid well for timber through the pandemic, which has contributed to higher prices for construction products and has resulted in more people not being able to cover the need for timber products for projects.
– What happens in the market is unhealthy. It will be an interesting winter if this continues. Customers are starting to get nervous, and we see that when there is a drop in new home sales. The positive thing, Jæger says, is that Swedish suppliers have lowered prices, but that there are still very high prices for building materials.
Selling Vacation Homes to Heaven
The sales rates of apartments, detached homes and detached homes were 19 percent, 23 percent and 26 percent, respectively, compared to the same period last year, said a press release.
Sales so far this year are up 22 percent over sales in the same period in 2020. On a twelve-month basis, sales are up 18 percent compared to the previous twelve-month period.
New home sales last year were generally low and at the same level they were in the aftermath of the 2010 financial crisis.
The start-up of new homes in August of this year was eight per cent higher in August of last year.
The start-up of new homes so far this year is 22 percent higher than that of the same period in 2020. Detached home start-ups are over 26 percent, while detached homes and apartments are up 20 percent from the same period last year.
New vacation home sales this year so far are 78 percent higher than the same period in 2020.
The start-up rate for new vacation homes so far this year is 33 percent compared to the same period in 2020.
On a twelve-month basis, new vacation home sales were 89 percent over the previous twelve-month period, and the start-up rate is 28 percent higher.
Used home prices are dropping
In the second-hand market, house prices fell in June and July nationally, while prices rose again in August. Home price statistics for Eiendom Norge showed that used home prices are now 9.4 percent higher than they were a year ago.
In Oslo, house prices fell from March to July, after reaching the peak of initial prices in February of this year. Thus July was the fifth consecutive month with lower house prices in Oslo measured in nominal prices, before prices rose in August.
Going forward, second-hand home prices are expected to continue declining nationally, and in Oslo, throughout the fall.
Developments in the new housing market are usually closely related to used home prices, but with a lag.
Correction: The Home Builders Association corrected the figure for new vacation home sales on a twelve-month basis from 189 to 89 percent in an updated press release.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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