– There is good momentum and more action in the housing market now. It’s fun to be at work when there are more and more interested parties and a bigger fight for the homes that are out there.
That’s what Simon Barood, estate agent at DNB, says.
In the last two months, he has sold several apartments in the Oslo area that have gone well above the asking price.
POSITIVE: Simon Barood, estate agent at DNB, is very positive about the housing market going forward. Photo: Stig B. Fiksdal
– The market in this area is back to the normal year 2020. It is, of course, somewhat price sensitive and affected by interest rate increases, but it has picked up considerably, says Barood.
400,000 above the asking price
In January, radio profile Vida Lill Berge and her roommate were to sell the apartment on Grünerløkka in Oslo.
A series of interest rate hikes and an uncertain housing market made the couple extra nervous before the home sale.
– It was very nerve-wracking because we had heard that the market was so bad. We were prepared that it would take a long time, but it went beyond all expectations, says Berge.
SATISFIED: The house sale went beyond all expectations for Vida Lill Berge and her partner. Photo: Erik Edland / TV 2
The loft apartment of 74 square meters had a suggested price of
6. NOK 300,000.
After a heated bidding war, the apartment was finally sold for NOK 6,700,000, i.e. 400,000 above the asking price.
– We are very satisfied. The apartment was sold after the first round of bids and we only had two viewings. It went really well, says Berge.
– The bidding rounds are back
Barood, who was responsible for the sale of Vida Lill’s apartment, says that interest in buying second-hand homes has seen a marked increase in the last two months.
– At Berge’s apartment there were 42 interested parties and just over 30 pieces on display. In the last week, an apartment has also been sold for 300,000 above the asking price, with 91 interested parties and over 50 showings, says the broker.
– By comparison, we had several screenings this autumn where maybe one or two people showed up, if anyone showed up at all.
He says that 35 per cent of the homes are sold above the asking price and 50 per cent below. The rest goes to the price estimate.
– I would say that these are good numbers. I can clearly see that there are more interested parties, often attractive viewings and the bidding rounds are back.
A new interest rate hike is expected in March. Barood, on the other hand, does not believe that a possible rise in interest rates will affect the market to a large extent.
– Of course it will affect some, but I think most people are over the biggest interest rate shock, he says.
– My impression when I talk to potential buyers is that they are calmer now.
Short-term recovery?
Housing prices rose by three per cent in January 2023. Seasonally adjusted prices were unchanged, figures from Eiendom Norge show.
Stavanger had the strongest seasonally adjusted price development in January. There, prices rose by one percent.
But not everyone thinks the future looks as bright.
– This is probably short-term growth. It is common for the new year to start with a lot of optimism and for prices to rise in January and February.
That’s what Nejra Macic, chief economist at the Prognosesenteret, says.
TOO EARLY: Nejra Macic, chief economist at the Prognosesenteret, believes it is too early to report a healthy housing market in Norway. Photo: Kristin Grønning / TV 2
Macic believes that the effect of the interest rate increases has not yet been fully achieved.
– We expect a possible interest rate increase in March. In addition, it takes six weeks before the mortgage interest rate is raised after the key interest rate has been set. This means that price developments in the housing market will most likely slow down beyond the spring.
The chief economist does not think house prices in Norway will enter a longer or stable period of growth until people are sure that the interest rate peak has been reached.
– It is possible that the next upswing in the housing market will happen again in the autumn, at least seasonally adjusted, when everyone is sure that there will be no more interest rate hikes, says Macic.
The new lending regulations have also had a positive effect on house prices in the first two months of the year, the chief economist believes.
– The fact that you are now being stress tested to withstand an interest rate increase of three percentage points, not five as was the case previously, I believe has had an impact on price growth in January and February. You probably lose this effect after spring.
– Especially in Oslo
Macic is surprised that price growth has been particularly good in Oslo at the start of 2023.
– The robustness of the housing market in Oslo in the last two months has been surprising. At the same time, one must be careful in interpreting individual months, and one must see the trend over a longer period of time.
– Oslo is the most interest-rate-sensitive market as the population in the capital is the most indebted.
In the long term, the chief economist believes that the potential for price growth in Oslo is significantly greater than in the rest of the country.
– The supply in Oslo is less than the demand, and the lack of new buildings will affect price growth in the future. In 2024 and 2025, there is room for stronger price growth in Oslo than in the rest of the country, says Macic.
