– The strongest fall since the financial crisis – E24
Eiendom Norge tracks how the housing market will be next year.
The case is updated
The forecast is based on an expected development in nominal house prices through 2023. In other words, December 2022 is calculated against December 2023.
In Oslo, Eiendom Norge expects a decline of as much as 6 percent.
Stavanger is the only big city where growth is expected. Eiendom Norge believes in a growth of one percent there.
– This is the sharpest fall in housing prices since the financial crisis, says CEO of Eiendom Norge Henning Lauridsen at a press conference on Wednesday.
In recent months, the housing market has begun to feel the effects of rent increases.
In the last three months, the market has fallen 6.5 per cent. Nevertheless, there has been an increase of 2.4 per cent from last year.
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Eiendom Norge believes that the largest part of the fall will occur in the first quarter of next year.
– The interest rate has a major impact on housing prices and higher rents will further reduce the price development in 2023. We expect that the fall in housing prices through 2022 will continue into the first half of the year, but that the development will be more positive in the autumn of 2023. By the summer, both the peak of the rent will probably be reached and the net increases be in the price into the housing market, says Lauridsen.
He also believes that the rest of the rising costs for Norwegians will have a strong impact on house prices.
– At the same time, there is great uncertainty surrounding increased electricity prices, inflation, housing demand and more general developments in the Norwegian economy. A major fall in house prices presupposes a significant increase in unemployment, and we see that as less likely, he says.
Many expect autumn
The key interest rate is now 2.75 per cent. The latest interest rate hike will probably mean that the best mortgage interest rates will be around 4 per cent when the banks follow through on raising their tenants.
Norges Bank expects House prices to fall 4.3 per cent.
It is far more conservative than Statistics Norway (SSB), which calculates that house prices will fall eight percent from the third quarter of 2022 to the third quarter of 2023.
Statistics Norway further believes that prices will fall in the coming years.
After such a fall, prices will still be at a higher level than before the pandemic.
Several major banks have already raised mortgage interest rates, including Nordea and DNB.