How were Norwegian house prices in August? The chief economist expects weaker-than-usual growth.
And we’ll get the answer to that on Tuesday of this week. Then Eiendom Norge publishes national housing prices.
August is usually a strong month for the housing market. Sarah Midtgaard, chief economist at Handelsbanken, expects house prices to rise in August as well, but below the normal rate.
– We think there will be a turning point now, says Midtgaard.
So far this year, she says, house prices have developed stronger than usual, despite a rate hike by Norges Bank. But now things will turn around, and we have to believe this great economist.
Handelspanken expects a seasonally adjusted decline of 0.5%, which corresponds to a nominal growth of 0.9%. Norges Bank, for its part, expects house prices to fall by a seasonally adjusted 0.1 per cent.
– She says there are many signs of cooling already.
The number of unsold homes has increased. In July, there were 14,300 unsold homes in Norway – the figure is usually 11,200.
In addition, seasonal changes, meaning house prices rise in the spring and fall in the fall, are reinforced by psychology and expectations.
Many people are pessimistic about the future of the housing market. She says more people will want to sell before buying, which could contribute to an intensification of the decline.
– She says: – We are facing a change in the housing market.
Is the service sector weak?
This week, a number of macro figures will be released from the US, China and Europe.
Anders Johansen, equity manager at Danske Bank, points out: Purchasing Managers IndexPurchasing Managers IndexThe Purchasing Managers’ Index (PMI) is an index that examines what purchasing managers think about the future of their industry, and is an important measure of the temperature of a country’s economy. The figures for the service sector are the most exciting.
The commodity sector, which focuses on the production of physical goods, is already tired. Johansen explains that since the post-coronavirus reopening, the commodities sector has weakened.
What has kept things going, in the US, Europe and China, is the services sector.
It will be interesting to see if the service sector holds up or if it weakens. He says it is the subject of review in all countries.
S&P Global’s composite Purchasing Managers’ Index, which tracks the US goods and services sector as a whole, fell to 50.4 in August from 52 in July. This is the largest decline since November 2022, according to the company CNBC.
– The US central bank wants to have a brake on inflation – but it shouldn’t happen too quickly, says Johansen.
In the United States, the job market has weakened over the past three months. It’s also a sign that the interest rate hike is beginning to bear fruit.
– The big question is whether the Fed has caught up too much – will we see a recession or will we see a soft landing? “We want to see that now in the future,” says Johansen.
We will also get an answer this week on how the trade balance is doing with Germany, the US and China.
The trade balance is the difference between the value of a country’s exports and imports. If a country exports more than it imports, its trade balance is positive.
Johansen believes the trade balance is an important indicator of a country’s economic health, and for Europe it is particularly interesting to see Germany’s performance.
The German economy is among the hardest hit, partly due to high energy prices, he says.
China Inflation will be published on Saturday morning, after the stock exchanges are closed. In July, the country witnessed negative price growth of 0.3 percent.
– It’s very unusual to have a negative development, which says something about the pressure in China compared to the rest of the world, says Johansen.
European Central Bank President Christine Lagarde is scheduled to deliver a speech on Monday.
– It’s rare to get anything very new in the speeches, but it’s good to watch – because we’re now approaching peak interest rates at the ECB, says Johansen.
In July, the European Central Bank raised its main interest rate by 0.25 percentage point to 3.75 percent. It is the highest interest rate level in the eurozone since 2001.
On September 14, the stage is set for a new interest rate meeting at the European Central Bank. Johansen states that it is currently uncertain whether or not Lagarde will raise interest rates.
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