May 24, 2022

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Houses, housing prices |  Unprecedented strong housing price growth

Houses, housing prices | Unprecedented strong housing price growth

Kvadraturen (Nettavisen Økonomi): Eiendom Norge’s latest figures show a 1.1 percent increase in prices for March. Normal seasonal fluctuations for the month are adjusted according to the season and increased by 1.0 percent.

Over the past twelve months, house prices in Norway have risen by 6.2 percent. At the end of March the average price of a house in Norway was less than NOK 4.5 million. In Oslo, the average house price is NOK 6.26 million, approx. 90,000 kroner per square meter.

You can follow the press conference at Eiendom Norge 11 here:

– Housing prices continued to rise in March. So far in 2022, house prices in Norway have risen by 7.6 percent. Henning Lauridsen, CEO of Eiendom Norge, said in a statement that this would make the first quarter of 2022 the strongest in the history of home price figures.

read more: DNB warns: – Some homes are raising prices

Decline, but good

But prices in Oslo fell 0.4 percent last month. This is even better than normal because seasonal adjusted growth was 0.8 percent. Housing prices in the capital have been up 4.1 percent over the past twelve months. It is actually the weakest in the country.

Oslo prices have risen 6.9 percent so far this year.

– If the offer increases in Oslo, inflation will remain calm, Laritson said at a news conference on Tuesday.

Inflation was 2.5 percent in Bergen, 2.1 percent in Stavanger and 1.4 percent in Tronheim. In the country’s three major regional cities, growth was stronger than normal for the month.

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March is generally a good month for the housing market, with 1.2 percent growth last year and 0.7 percent growth in 2019. However, in the Corona year of 2020, prices fell as a result of the uncertainty that arose.

read more: The most expensive house in the city of Fortress in the middle of Oslo: reduces the price by 30 million.

More than normal

This year’s housing market has been characterized by an unusually large split in some of the houses that have come out. But the trend has been reversed, DNB Eiendom now reports The record flow of homes in the market.

– In March, many new homes were put up for sale, in fact not as many homes were on sale in Norway in March as never before. Balance in the second hand home market is improving.

Nonetheless, many of our members warn that it will take time to get status reports of homes for sale this spring. So we encourage home sellers to prepare for home sales in advance, ”Laritson said in a statement.

read more: Housing construction: Oslo is bad at the latest exam

Relaxes

In March, 8976 homes were sold in Norway, down 7.1 percent from the same month in 2021. So far this year, 20,676 homes have been sold in Norway, 13.7 percent fewer than between January and March 2021.

In March, 10,201 homes were sold in Norway, up 0.6 percent from the same month in 2021.

– Laritson said not so many homes have come up for sale in Norway in a busy month.

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The Norwegian Real Estate Association (NEF) denies that the stringent requirements for conditional statements are a hindrance to the market and high prices.


The track is full

– It is a difficult request to find sources in sales data. The fact is that while 20,226 homes have been sold so far in 2022, only 20,676 homes have been sold. The connection between the disposal law and the lower turnover seems to have been a trace.

– Everything points to the fact that we are seeing a change in the housing market over the past two years with epidemic-driven demand and strong price growth. On the way to default, we must also take into account that higher inflation and higher interest costs may bite home prices. Carl O. Geving, CEO of NEF, says in a press release that nothing grows in the sky.

It took an average of 30 days to sell a house in March, up from 38 days in February. Oslo and Bergen had the lowest sales time with 16 days.

DNP Markets wrote in the morning that there are some signs that the disturbances may ease slightly. The brokerage forecast that seasonal adjusted inflation would be 0.3 per cent in March, down from 0.7 per cent in February.

Handelsbanken expects seasonal adjusted growth of 0.5 percent, slightly higher than Norges Bank’s (0.4 percent). The ratings for the two brokerage firms are very pessimistic.


Slows growth

Interest rates play an important role in the growth of prices in the home market. DNB hopes that in the next few years, higher interest costs will cause a barrier in the market. On March 24, Norges Bank signaled seven more interest rate hikes in the future.

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If the Fed is right, the core policy rate will be 2.50 percent by the end of 2023, up from the regular mortgage rate of 4 percent. However, the fixed income market expects the core policy rate to end at just 2.75 per cent next year.

Experts in DNB are satisfied with 2 percent, and this is enough to control the temperature in both the economy and the home market.