The Norwegian Real Estate Association says the impression is the same in the rest of the country as well.
– There is reason to believe that things will get worse, says Karl O. Giving, managing director of the Association of Estate Agents of Norway, told Nettavisen.
Within two years, the key interest rate rose from zero to 4.25 percent. The interest rate path points to a peak interest rate of 4.5 percent before the end of the year. This means a range of mortgage interest rates of around 6 percent.
Quite simply, a higher mortgage interest rate means that our mortgage servicing becomes more expensive, which can pose challenges for those who already have limited personal finances.
Giving at the Norwegian Association of Real Estate Agents says they are now seeing more petitions related to forced housing sales in the capital, but actual executions of forced sales have not increased.
What is forced sale?
Foreclosure is one of the last steps in a long process that begins when the owner fails to service his or her debts. The basic requirement for a forced sale of homes or assets is that a lien has been taken on what you own and foreclosure proceedings have been taken. In addition, the payment obligations related to the mortgage must be breached. The case must also be convincing. This means that foreclosure actions were taken within the last year, or a Notice of Enforcement/Forced Sale was sent with a 14-day payment deadline, and that deadline has expired. A lien is a legal decision to collect a debt by seizing assets such as: deductions from wages and mortgages on real estate, cars, and boats. source: Finanseiendom.no
An overview sent by the Oslo City Clerk’s Office to Nettavisen shows that forced sale applications in Oslo increased significantly from 2021 to 2023.
So far this year, there have been 632 more forced sales than in all of 2021. However, completed forced sales declined, falling by more than half compared to two years ago.
– It should be interpreted as people doing everything they can to avoid losing their possessions, and so far most people have managed to avoid this, says Giving.
It is believed that people sell what they have of value, such as a car, before the house collapses.
– It also has to do with the fact that the last bill we stop paying is the mortgage or rent. At least from our general experience other things come first.
The Norwegian Association of Estate Agents’ communications director, Sven Stromnes, cannot confirm that Oslo’s statistics reflect the rest of Norway, but he tells Netavsen that the impression is that the same applies outside the capital as well.
Bank of Norway: – It is likely that more people will have to reduce their consumption
Norges Bank on Wednesday submitted a report looking at vulnerabilities and risks in the country’s financial system.
The main finding is that the Norwegian economy has good resilience, even if risks are still high.
– Rising inflation and increasing interest rates mean that some households and businesses may have problems servicing loans, but most will be able to cope with increased expenses, Central Bank Deputy Governor Pal Lungva says in a press release.
Polegtop redecorates himself – shaking his head
One result is that Norwegian households still have a lot of debt, and that higher interest rates mean they have to spend more of their salaries on interest. It also means that more people are using their savings.
The report says that the vast majority of households can service their debts, but it is likely that more households will have to reduce consumption.
– FifthIt’s hard to pinpoint anything
Although the statistics for completed foreclosure sales point to a positive trend, Giving at the Norwegian Association of Real Estate Agents is unsure whether this will continue, or whether we will at some point see a wave of foreclosure sales.
– We have not seen what we are doing now in light of these expensive times over such a long period of time, and interest rates rising so quickly. It’s hard to pinpoint anything, but there’s at least reason to believe that the worst is yet to be seen, says Giving and continues:
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– It can be as simple as the fact that you’ve used up your start-up capital, the reserves are gone, and you’ve sold what you can. If you are also facing life crises, it can become difficult. The Director-General concludes that there is reason to believe that it will get worse, but we can hope that it will not be on such a large scale.
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