Steep decline in Obos prices in December – NRK Norway – Overview of news from various parts of the country
– Prices tend to fall in December, but fell far more than normal in December last year, says chief economist Sissel Monsvold in Obos in a press release.
On average, prices in Oslo have fallen by 0.7 per cent in December in recent years, according to Obos. The housing market is therefore cooling down further after several months of decline.
The fall at the end of the year has nullified the strong upturn in Oslo with which 2022 started. Over the past twelve months, prices have fallen by 1.6 per cent, while on a national basis, prices have remained unchanged from December last year.
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I think new loan rules will dampen the fall
The brokers’ industry organization Eiendom Norge will release figures for December next Wednesday.
The Obos figures account for approximately a quarter of homes sold in the capital, and a much lower proportion nationally. Obos believes their own figures are weaker than Eiendom Norge’s figures.
– The figures must be interpreted with caution because fewer homes were sold than usual, says Monsvold.
DNBs believes that the figures from Eiendom Norge will show that prices fell by 2 per cent in December.
– It is primarily the marked increase in net income that has led to the marked, negative reversal in the price, says chief economist Kjersti Haugland.
Policy rate in percent
The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of raising the interest rate is for the high prices to come down again.
The forecast tells us how Norges Bank thinks interest rates will develop in the future.
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A higher interest rate means increased expenses if you have a mortgage
Most economies believe that 2023 will result in a slowdown in housing.
Obos believes that prices will fall by 2–3 per cent in Norway this year, but the price drop will be moderated by the fact that the government has made it a little easier to get a mortgage.
– We assume that a good part of the price drop was taken out through the weak autumn last year. [ …] The changes to the requirements for serviceability in the lending regulations from 1 January this year will dampen the price drop somewhat. So does higher wage growth and increased net immigration. At the same time, we would say that the uncertainty is great, Monsvold.
Warns of a rent shock next year: The family with children will get 20,000 more in rent
See interest rate peak in March
More expensive clean and strong price growth means that people’s housing budgets shrink, at the same time the bank will give less in loans to buy a home.
The key interest rate is 2.75 per cent after a rapid rise over the past year and a half. Norges Bank has announced a further rise in rents at the start of 2023, and most people will then receive a mortgage interest rate of over 4 per cent.
– Interest rates will probably reach a peak in March, and by then we also believe that the house price fall is over, so that prices will rise again, albeit moderately. The tight supply side, especially in the central region, is an important reason why we believe the potential for a major fall in house prices is limited, says Haugland.