Last year the housing market in Oslo was searing with a price increase of 24 percent. Now several brokers report a drop in temperature.
– We find that there are fewer people at viewings, a more selective market and that people are more cautious in bidding rounds, says CEO of the real estate broker Krogsveen AS, Leif J. Laugen.
The last twelve months prices in Oslo have increased by 1.8 percent on average every month. Laugen now thinks that the time with steep price increase is at its end:
– There will be more new residents available, the market rate will not be lowered any further and the authorities have tightened in on lending capabilities, Laugen said.
Several other brokerages that the Norwegian Public Broadcaster (NRK) has been in contact with says there are signs that the Oslo market is beginning to slow down
Think Oslo apartments could fall in price
The galloping prices in Oslo in recent years have meant that prices in the Capital have raced ahead of the rest of the country (see graph). According to calculations Krogsveen have made the price per square meter for apartments is now 85 percent higher in Oslo than in the rest of the country.
– This gap has never been as big as it is now. We believe the difference may not continue to grow, but rather that we will see a normalization between the prices in Oslo and the rest of the country, according to Laugen.
He believes the prices for apartments in Oslo will level out or even fall into the autumn.
– From August we can get to see a decrease of about one percent per month, Laugen estimates.
Banks confirms tightening on mortgages
The new mortgage regulations that came into force on January 1st this year includes more tightening of the allowed level of mortgage to contribute to a more ‘sustainable’ development in the housing market.
In the capital there is introduced a requirement of a minimum 40 percent equity for the purchase of secondary housing, partly to curb speculators.
Several banks now report that the regulations have taken effect:
– Tighter rules make it more difficult for us to find a solution within the framework of the individual customer, says CEO in Nordea Norway, Snorre Storset.
– In some groups there are also several who now get a no, he adds.
Also in Norway’s largest bank DNB, has the new regulations had an effect, says information Manager Even Westerveld:
– People still get loans, but some somewhat smaller loans than before with the new rules. And those who want to borrow for secondary residence, either for rental or for their children, might get turned down, he says.
Source: nrk.no / Norway Today