Peeter Hermanrud, chief of strategy at Sparebank 1 Markets, believes housing prices could fall by more than 20%, and the decline may last for up to 7 years.
He told Dagens Næringsliv newspaper that he thinks there is a high chance that prices may stay low for between four to seven years.
‘There is a good chance that it will be a very big price decline. It could fall by 20%, plus,’ said Hermanrud to the newspaper.
He indicated that housing construction is at a record high, while population growth is
diminishing. Moreover, investment in housing in Norway is larger than oil and gas
investments combined.
‘Now we have reached a level of debt which means that if housing prices continue to fall, households will need to save a lot more than they have done so far. If you are in the housing market, you can upgrade when house prices rise.
When it stops, it when it stops, very much to be invested to allow people to afford new housing.
It could affect saving, and have major consequences for the economy,’ he said.
© NTB Scanpix / Norway Today
