Swedbank believes the decline in housing sales will last longer and plummet deeper than previously assumed. The bank believes housing prices in Oslo must drop 20 per cent before the market turns.
“We do not have a vision as bright as most others,” says chief economist Øystein Børsum of Swedbank to Dagens Næringsliv. He believes construction of housing must end before prices stabilize.
“Housing developers have to cut prices by 20 per cent on new homes in Oslo before this turn. It will take time. I hope I’m wrong and that we get over this, but I’m afraid they’re going to hang on for longer, “says Børsum. He indicates that the construction act is the highest in 40 years.
The bank does not believe the market will turn before 2019. In addition, they believe that lower housing investment will shrink growth in the Norwegian economy from current two percent to about one percent. In addition, unemployment will increase.
Sociologist Mari O. Mamre in the analysis agency Ny Analyse does not fully agree.
“I think Swedbank is a little too pessimistic in their view. I think we’ll bounce back quite a bit in 2018 seen as a whole, but a big drop in prices is a very pessimistic scenario, “Mamre says.
Managing Director of Selvaag, Baard Schumann, also disagrees with Swedbank’s analysis.
“It is true that there are greater homes numbers of houses that are not sold at present. But it will halt because there is no one who is going to initiate projects now that they do not sell.”
© NTB Scanpix / Norway Today
