(online newspaper) Housing prices have been the talk of the town over the past year due to frequent interest rate hikes. Growth has become headline news. House prices fell Four months in a row At the end of 2022, but house prices started to rise in January.
In January, home prices also rose 3 percentand peaked in February Home prices are up 1.5 percent. March figures are due this Wednesday.
There is great excitement about what prices Norwegian home buyers and sellers can expect in the coming years.
Handelsbanken issued a new report on Monday. Storbanken expects housing to contract by an average of 2 percent this year, before accelerating. But from next year, the bank expects another rate hike.
– The door can be closed
“At the same time, if the interest rate trend is weaker than we now imagine, we warn that the surge in Oslo will again be uncomfortably strong,” the bank wrote in a macro analysis.
– While the risk of a recession is higher in Oslo in the short term, there is reason to believe that the coming boom will be stronger than in other parts of the country at the same time, said senior economist Sarah Mitgard. E24.
– This could close the door to more people wanting to re-enter the market, he added.
New dynamics
Senior Economist Oddmund Berg at DNB Markets says they have a very similar picture of the situation.
– We expect house prices to fall by around two percent this year. After that, we expect average annual price increases of 2.1 percent in 2024, 2.5 percent in 2025 and 4.8 percent in 2026, Berg du Netavisen says.
As with Handelsbanken, Berg notes that some parts of the housing market are in short supply.
– This means it’s easy to think prices will move upwards too quickly, Berg says.
– Unique situation
Nevertheless, the veteran economist highlights one thing he believes is important to take into account when reading the news from these reports:
– The dynamics in the housing market are probably different when interest rates are lowered than when interest rates are raised. A fall in interest rates would probably have a more beneficial effect on price growth, while a rise in interest rates would not lead to a fall in prices in the same way. We have to be a little careful in interpreting the predictions from the models literally. After all, Berg says, they are based on long-term interest rates and rising home prices.
In addition, he points out, Norwegian households have endured both high levels of inflation and interest rate hikes that have affected the private economy.
– We are in a unique situation in the Norwegian economy. There is high savings and low unemployment on record. This makes it difficult for experts to assess how strong and sustained the momentum of the Norwegian economy is because we don’t have such episodes to compare, Berg says. Berg says.
– Price pressure at the national level
Nejra Macic, chief economist at the Center for Forecasting, agrees:
– In the next two years, fewer new homes will be completed in Oslo than needed, and this will push prices up again in 2024-25. Macic tells Netavision that there are good prospects for interest rate cuts in early 2024, which will also contribute to price pressures nationally.
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