Eiendom Norge believes that house price developments are exciting. The Governor of the Central Bank is also surprised.
Seasonally adjusted, inflation was 0.7 percent. That means home prices rose slightly more than usual in April.
So far this year, house prices in Norway have risen by 6.8 percent. The price has now increased by 0.5 percent compared to last year.
– In light of the fact that the key interest rate has now reached its highest level since 2008, the development is exciting. The housing market is less sensitive to interest rates than many, including us, think, says Henning Lauridsen, CEO of Eiendom Norge.
Central Bank Governor Ida Woltenbache was also surprised.
– The growth of house prices in April was higher than we estimated, he tells E24 after today’s interest rate decision.
Read on E24+
Experts agree when the fall in house prices will come: – Inevitably
– Restored purchasing power
The Eiendom Norge manager links the rise to strong growth in the Norwegian economy, a good labor market and the fact that relaxations in credit terms have been adopted.
– The latter, average homebuyers have regained the purchasing power they lost in the fall.
In Oslo, house prices rose 0.7 percent or 1.0 percent.
10.2 percent fewer homes were sold in April than in the same month last year. It took an average of 42 days to sell a home, up from 40 days in March.
New house numbers will have an impact
Statistics from Eiendom Norge show price growth for used houses.
At the same time, sales of new homes have fallen to record lows in recent months.
– This gives a very bleak forecast for housing construction in the coming years, which puts strong pressure on second-hand housing prices, Lauridsen says.
He points out that construction and financing costs are too high compared to new home prices.
He believes that to accelerate new home sales, costs need to fall or second home prices increase.
Read on E24+
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I believe the price will drop in the fall
Lauridsen and Eiendom Norge aren’t the only ones in the industry to be surprised by house price improvements.
Experts now expect the price drop to come only in the fall. The Eiendom Norge manager supports that analysis.
– We are convinced that the summer will be flat. “We imagine prices will drop a bit in the autumn,” he tells E24.
According to Lauridsen, you finally get “what should naturally happen with interest rate increases.”
– Then there will be relatively high unemployment in the construction sector beyond next year. These are effects that have a negative effect over time.
Nordea Markets expects an even higher interest rate peak of four percent
More activity in cities
Despite interest rate hikes and rising costs of living, housing prices may fall in wait.
According to DNB, in Oslo and other big cities, the housing market is at full speed.
– In the most attractive houses in Oslo, it is not unusual to have more than 20 interested parties and sometimes heated bidding rounds, says Renate Sørestrand-Hansen, managing director of DNB Eiendom.
Part of the explanation for the recent high activity is that there are fewer homes for sale in major cities than usual at this time of year, he explains.
– Now that spring is finally announcing its arrival, we expect more houses to hit the market.
According to TNP, cities are the “engine” of the housing market. In rural areas, activity is much quieter.
– We have a picture of this situation throughout the year.
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