Global Courant
– Time for people to slow down a bit, says Meglertopp. But a crisis on the housing market? In no way.
Homes in Oslo are selling quickly despite the fact that many people’s private finances are under pressure.
view morePublished: 27/09/2023 05:21
Despite galloping interest rates, torpedoed purchasing power and dark clouds on the horizon, real estate agents are reporting “perfectly good” times in the market. Both Nordvik and Privatmegleren have an almost identical short version when summarizing the housing market:
– It will take a little longer to sell, but you will sell. And at a good price if you have an ice cream in your stomach.
The words are from Nordvik CEO Martin Anmarkrud Kiligitto and Grethe Meier, director of Privatmegleren. They are not at all prepared to warn of major future house price falls, but add the following prediction:
Grethe Meier
Director at Privatmegleren.
There will be a price drop later in the fall. Prices have soared during the pandemic and through August. Now we get a correction.
– People are starting to feel the interest rates and inflation on their bodies, Meier says.
Kiligitto has a similar assessment. He also believes that it actually makes sense if the market slows down a bit.
– It’s about time people got on the fence a little. “We have been surprised by the level of activity so far,” he says.
Martin Anmarkrud Kiligitto
CEO at Nordvik.
Aftenposten will write several stories about the housing market in the coming weeks. If you are not getting a sale or are experiencing other issues in a cooler market, please contact us The journalist from Aftenposten hereThe journalist from Aftenposten here[email protected].
Dark background
Economists may seem to take a cold approach to warm values such as homes and homes. In fact, some seem to have a near-unyielding belief that even humans are rational consumers—at least ultimately. Nevertheless, the content of their calculation is quite simple:
When the cost of living rises, the price of the house itself will fall. Underneath this lie numerous complicating effects – yes, even many emotions – that influence the market.
The cost of living will continue to rise in the future. When Norges Bank increases interest rates, it will take a few months before you get it to your online bank. And in December you will probably be served even higher interest rates, we have to believe the governor of the central bank.
Not being able to sell a house for the price you dream of is a luxury problem. What is a crisis if you are left with a home that you have to get rid of because the price has fallen so much that in practice insolventinsolventInsolvency occurs when a borrower is unable to pay what he owes to the lender or is unable to meet other obligations related to the loan. If you mortgage a property up to a maximum of NOK five million in accordance with the mortgage rules, i.e. an 85 percent mortgage, a house price drop of 15 percent could mean that you have no equity. Without so-called equity, it will be difficult to get a new loan.. That hasn’t happened for those who bought a house this year: prices in Norway have risen by 5.7 percent this year.
But it happened quite recently in Denmark:
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House prices in Denmark have fallen. Kim Stuhr Jakobsen bought at the top.
Yet Aftenposten has previously written about the fact that more apartments are now being foreclosed on than before. Even before interest rates really rose, one in five had a vulnerable economy, according to Norwegian statistics. This means that you cannot manage an unexpected expense of NOK 20,000.
What happens now then?
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While people in the east are becoming housing millionaires, many in the south and west are selling at a loss
– Easily negotiable
Eiendom Norge publishes monthly statistics on the Norwegian housing market. The conclusion is clear: housing is still an easily traded commodity in Norway.
In August it took 38 days to sell your home. Things are moving even faster in the capital. For example, in Grünerløkka and Grorud it took only 15 days to sell a house in the second quarter. The current turnover time in Norway as a whole is, so to speak, the average of the last 15 years. The fact that the trading time is increasing somewhat is positive, according to the brokers.
– Now you get a little more time to look around, I usually think it goes too fast in the bidding rounds, says Meier.
– We see that there are a number of tough weeks every autumn. It takes longer, but it’s going well, Kiligitto says.
Housing is still easily negotiable, especially in urban areas.
view moreType of home is decisive
There are articles that homes with a sales price above ten million are currently more difficult to sell. That opinion is shared by the brokers Aftenposten spoke to. Meier says that those buying homes for around ten million tend to be families with children who stretch the rope while also having certain high expenses (read: children).
For this group, interest rates have a major influence on purchasing power, causing house prices to drop.
For buyers in the 15 million class, interest costs are no longer that important, according to Meier: Simply because this group is quite wealthy.
Small apartments suitable for one to a maximum of two people in central areas are still extremely popular.
The housing market is moving a bit slower, but real estate agents see no signs of a crisis
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