The decline in new home sales worries industry leaders: – There are very bad sales numbers

The decline in new home sales worries industry leaders: - There are very bad sales numbers

On Thursday, Boligprodusentenes Forening provided new home sale and start-up numbers for the third quarter and September.

We are now seeing that high growth in building materials prices and rising land costs have created uncertainty in the market, and people are becoming more hesitant about buying a new home, Boligprodusentenes CEO Forening Per Jæger says in a press release.

New home sales in September were 23 percent lower than the corresponding month a year ago, while sales in the third quarter were 23 percent lower than the corresponding quarter last year. These are the lowest sales for September and for the quarter since the association began recording monthly sales in 2010.

– We are concerned about lower new home sales, says Jæger.

Sales so far this year are still 15 percent higher than sales in the same period in 2020, and on a twelve-month basis, it’s 14 percent above the previous twelve-month period. Sale of detached homes so far this year is up 21 per cent, detached homes up 6 per cent and apartments 16 per cent compared to the same period last year.

– I was hoping for a flatter effect on apartment sales, but the drop is bigger than expected, says Jæger.

Start building new homes

New home startups in September were seven percent in September of last year, while startups so far this year are 16 percent more than startups in the same period in 2020. On a twelve-month basis, total startups are up 10 percent over the previous twelve-month period.

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However, the association believes that there is a shortage of new housing in several places.

– We see that there is a shortage of new housing, which limits growth and relocation in the municipalities, says Jæger.

Per Jaeger, CEO of Boligprodusentenes Forening, is concerned about the drop in new home sales.

Per Jaeger, chief executive of the Home Builders Association, is concerned about the decline in new home sales. (Photo: Skjalg Bøhmer Vold)

– When the epidemic restrictions are now removed, it is necessary to expedite the completion of the ongoing zoning plans, so that the shortage of new housing does not stand in the way of the desired development in the municipalities, says Jæger.

– He believes that bureaucracy and many new rules hinder housing construction in major cities.

He is also concerned about increasing land costs.

– The costs of goods have increased and now you have to make money from plots of land. He says the one who arrives at the end is the consumer.

It may seem that many people think that there is an unlimited desire to pay from consumers, but it is not. The market will go down until we get this under control.

Good market for holiday homes

New vacation home sales this year so far are 58 percent compared to the same period in 2020.

Startups of new vacation homes this year so far are 37 percent compared to the same period in 2020.

On a twelve-month basis, new vacation home sales were 74 percent over the previous twelve-month period, and start-ups were over 34 percent.

– Ola Nordmann bought himself on the holiday home market when the country shut down. Now there is a slight decline, but growth is still strong. Sales are very good, the startup depends a little on the maximum sales achieved. I think many cabins will be built in Norway in the future, says Jæger.

Responds to lower prices

In the second-hand market, house prices fell in June and July nationally, while prices rose again in August. Eiendom Norge’s home price statistics show that used home prices are now eight percent higher than they were a year ago.

In the capital, housing prices have risen sharply during the pandemic, but reached a temporary price peak in February. Except in August, house prices in Oslo have fallen every month since February, measured in nominal prices.

– Jæger believes that the high prices of used homes in Oslo through the pandemic testify that there is a huge shortage of new homes on the market.

Going forward, second-hand home prices are expected to continue declining nationally, and in Oslo, throughout the fall. Jæger believes that lower prices in the flea market are reflected in the meager new housing numbers.

“There are very poor sales numbers that testify to a strong reaction to what is happening right now in the market,” he says.

Developments in the new housing market are usually closely related to used home prices, but with a lag.

Rise for Obos

In the third quarter, Obos sold 3,062 homes in Norway and Sweden worth NOK 13 billion. This is 24 percent more than at the same time last year.

Home sales so far this year have been very good. We have planned several sales beginning during the fall and winter to keep the supply side high, thanks in large part to a long-term land investment strategy that ensures access to plots ready for construction, says Opus CEO Daniel Korberg Serraj, in a press release. .

The homebuilder had 6,696 homes in production at the end of the third quarter, up 21 percent from the same period last year. Construction of 2,963 homes has begun, an increase of 12 percent over the same period last year

We have been able to use our financial muscle to start building a large number of new homes for our members in recent years, and in the future we will maintain a record high housing production. Siraj says it’s an important contribution to lowering home prices in the long run – especially in Oslo and other places with significant price pressure.

So far this year, the homebuilder has completed 1,906 homes, compared to 2,209 last year. This is a 14 percent decrease compared to the same quarter last year.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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