The Hub (online newspaper) – This is a very simple war in Ukraine. I think it’s scary and unpredictable, and we do not know to what extent we can be inspired by it. Everything else talked about, interest rate hikes, inflation, we were before. We can handle it well, but the war is fierce, Ringnes says.
We met him earlier this week at the big conference for Eiendom Norge. The question he received from Netavisen was what he was most concerned about in the future. Generally optimistic ringness worries more than usual.
– In a very small film, it looks good. The economy is growing, and interest rates have not yet risen. Especially for those of us who own hotels, this is “more than all the time” than 2019.
– Now we are in the sun. But there are many big thunder clouds around this sun. Despite being fine now, I do not dare to be optimistic, the message is clear.
Not going to come anymore
Restless war is not the only one. High interest rates and the risk of inflation – inflation – a topic at the conference. Professor Charles Goodhardt At the London School of Economics, participants warned that low interest rates and the period of inflation were over. The period we have experienced in the last 10-20 years is unlikely to come back.
As the main owner of Eiendomspar, Ringnes is subject to both price and interest rate hikes.
– The best thing for us, of course, is to keep inflation low or, more importantly, lower interest rates. They are connected. Higher interest rates, if all else being equal, will no doubt lead to a decline in property values.
– If it lasts a long time, inflation is favorable for real estate. In the case of real estate, unlike all other assets, inflation will increase. But along the way you will die of curiosity, which is what people pay so much attention to.
– How do you see the housing market in the future, you worry Low housing construction in Oslo?
– Some people say that price creation is not so important even if you build many or some houses. It’s obviously yeast. If you have a lot of offers, prices will go down. An important part of the price tag is streamlining construction processes, getting shorter case processing, and ordering more homes, Ringness Answers.
Then we have the rate of interest, which directly affects the demand, and if there is a small demand it seems to be the opposite of a small supply. Then we will see a fall in prices.
– If not so dramatic, now mostly price decline. But if housing rents rise from 2 percent to 4 percent, it will reduce demand, says real estate agent Ringnes.
Increases by seven
After the war in Ukraine, the strike in China and the epidemic both businesses and families are now experiencing cost increases. Also, Norges Bank has issued a notice Seven interest rate hikes, starting in June. When asked how Eiendomsspar notices the cost increase, Ringnes responds:
– We have not received any interest rate restrictions yet, but we have several construction projects. How it works is a bit unclear, but it’s definitely not positive. We have a plan in Tromsø and we had to postpone it. The contractors were not given the opportunity to take the contract, otherwise it was fully negotiated.
– We have some major construction projects in the center of Oslo, which are not much affected at present. But there are some important input materials, especially on steel, which are very expensive. We are re-projecting to concrete that is not that high.
Up to 20 percent
Ringness says some specific technical things are not available to them due to the closure in China. At the moment, it is a bit confusing how big the challenge will be.
– But at least it’s not cheap. Our plans may cost 10-20 percent more.
Ringnes now estimates construction costs – pure construction costs – up to NOK 60,000-65,000 per square meter for new homes in Oslo. That is, the cost of building a new apartment at a speed of 75 square meters alone would cost NOK 4.5 million.
100,000 kroner per square meter
In addition, there are expensive land costs and other costs for home developers. The selling price is over NOK 100,000 per square meter in central Oslo.
Selvaag Bolig’s new project on Løren / Sinsen Sold for 106,000-107,000 kroner per square meter. According to Netavichen, Obos achieves 102,000-103,000 kroner in Wollebeck, west of the crotch. Price pressure in the city has spread eastward.
And tenants are paying more attention because most tenants can adjust their rent in the fall with the consumer price index. At present it is more than 5 per cent.
– We adjust the code every year. Now these codes are not so important to tenants. They also have the opportunity to increase their prices, so Ringness says we are not currently experiencing a big debate on this.
Electricity prices were very high in southern Norway this winter, but are often offset by the supply of electricity to homes. On the other hand, ordinary companies do not benefit from this support.
– Is electricity an important topic of discussion with tenants?
– No, everyone realizes that electricity is expensive, and many of our tenants pay for the electricity themselves through their own subscriptions.
– They get some increase in general costs from us, but in the big picture this is not the main thing. But what is needed after that will always be embarrassing, especially for generic costs, so we prefer lower electricity prices, Ringnes responds.
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