Never before have there been so many homes for sale this September. This means that the price decline is delayed, according to the chief economist.
On Friday, we will find out how house prices developed in October.
It is common for home prices to decline in the last four months of the year, but in October home prices are expected to fall more than usual.
DNB Markets expects house prices to fall by a revised 1.0 percent Seasonal changesSeasonal changesWhether house prices fall or rise varies from month to month. In order to find out whether housing prices are falling or rising more than usual, the “underlying price development”, we will correct for seasonal changes. .
The effect of the interest rate is what makes us believe in this decline. Norwegians are entering a period when people are more cautious, says Kjersti Hoogland, chief economist at DNB Markets.
“But we thought that in September as well, and then there was only a 0.2 per cent drop in prices,” she adds.
Hoogland believes Norway’s housing market has held up surprisingly well given all the interest rate hikes in the past year.
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Therefore, the next inflation number is very important for thousands
Record number of unsold homes
One of the clearest signs that the housing market will witness poor development in the future is the increase in numbers Unsold homesUnsold homesNumber of homes for sale that were not registered were sold within 180 days from the date of the announcement..
Nationally, there have never been as many unsold homes in September as there are in 2023. That’s 37 percent more than the September average over the past 14 years.
– The housing market is tough. Unsold homes are piling up, says Kjetil Olsen, chief economist at Nordea Markets.
The fact that the number of unsold homes is increasing may mean that the price decline may be delayed – or will be lower than the actual level.
The seller will not lower the price as much as the buyer wants to buy. The seller then chooses to wait or pull the property from the market.
– It is assumed that prices have actually fallen more than the statistics indicate. “Don’t sell unless you have to in the current climate,” Olsen says.
Expect fall to be short-lived
But despite the poor mood in the housing market, DNB Markets does not expect the price decline to be long-lasting.
– We believe that prices will stabilize in the new year and start rising again in the spring of 2024, says Hoagland.
She explains this by saying that the supply side is tight.
2023 so far has been a bit of a bullet when it comes to new home sales and housing construction. In September, new home sales fell 38 percent nationally.
New home construction starts in the third quarter were 50 percent lower than in the third quarter of last year. It was a new low.
Significant regional differences
The number of unsold homes in September compared to the average varies from region to region.
In Asker, Barum, Drammen, Follo, Rumeriki and Bodo, there were almost twice as many unsold houses as in others.
On the other hand, the number of unsold homes was much lower than usual in Stavanger and Kristiansand. The cities are also among the few where prices rose in September – largely due to increased activity in the oil and gas industry.
Analyst Marti Hergé Ströme of Prognosesenteret says it is difficult to pinpoint exactly what distinguishes each local market.
The fact that the number of unsold homes is increasing may be due to the fact that households are now willing to sell to a greater extent before buying, that the length of stay in homes is increasing, and that investors are selling rental homes.
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