Buyer’s market, experts predict.
Over the past year, house prices have risen 13 percent nationwide, largely due to low interest rates. Housing experts now believe that the trend will reverse with the expected interest rate jump this autumn, and that prices will fall.
– Our estimates say that one percentage point higher interest rate leads to the fundamental housing prices falling around 14 percent, says André Kallåk Anundsen, who works in Housing Lab, the national center for housing research at Oslomet, to Today’s business.
Nordea believes that an increase of one percentage point will occur already during 2022. Before the pandemic, the key policy rate was 1.5, but we will probably not reach this level until 2023-24, Nordea estimates.
However, Anundsen does not envisage a sharp fall in prices overnight:
“An interest rate increase does not mean that house prices will fall sharply in the short term, but that inflation will gradually slow down to adapt to a higher interest rate level,” he told DN.
Falls in Oslo – does Norway follow?
The last time Eiendom Norge came out with house price statistics was 3 June. Then they could report that house prices rose by 1 percent in May. The exception was Oslo, where prices fell by 0.6 per cent.
– We expect a better balance between supply and demand with a shift from the seller to the buyer’s market. This will provide a more sustainable housing market in the time to come, said CEO Carl O. Geving of the Norwegian Real Estate Association at the time.
Also read: Interest rate warning: Four withdrawals in one year
Mari O. Mamre, housing researcher at NMBU, agrees with:
– I think house prices will continue down in Oslo, and that Norway will also tip over to the minus side soon. We see that the pressure in the market has shifted from seller to buyer’s market, she told DN on Sunday.
Chief economist Harald Magnus Andreassen also tells DN that the interest rate cuts last year were probably – more or less – the only reason why house prices rose, and that other factors did not suggest that they should skyrocket as they did.
Alerts interest rate increase
On 17 June, Norges Bank announced that it would keep the key interest rate at 0. At the same time, they announced an interest rate increase in September.
The key policy rate has been at zero since 7 May last year. Norges Bank’s interest rate committee has announced that it will be kept quiet until there are clear signs that conditions in the economy are improving.
– As we now assess the outlook and the risk picture, the key policy rate will most likely be raised in September, said Governor Øystein Olsen on 17 June.
Also read: Can set price record: – People do not need a cottage with this home
The experts then agreed that the interest rate will not be changed until the interest rate committee has a new meeting in September. It also showed the interest rate path, which is Norges Bank’s forecast of future interest rate developments.
Indicates two interest rate increases
The interest rate path was revised due to signs that the economy is about to normalize.
Nordea’s analysts thought the interest rate decision was as expected, and that there are clear signals of two interest rate increases this year: one in September and one in December.
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