Bonum remains confident about the housing market

Even though housing prices have fallen, macroeconomic conditions point to positive housing price development in Oslo

In recent months, housing prices in Norway have fallen somewhat, but from record-high levels. The main reason is higher supply and stricter lending practices at banks. In Oslo, low supply and very high price growth have characterised the housing market, but according to Ann Kristin Aure, macro analyst at Bonum AS, this now appears to be reversing.

"Most macroeconomic conditions point to positive development in housing prices. It does not appear that banks will tighten credit practices further in the near future, interest rates will likely remain low for a long time ahead and employment is increasing," she says.

"Much also depends on psychological factors and how supply will develop going forward. With an increased degree of uncertainty and negativity in the media coverage, we at Bonum believe that buyers may become even more conscious and selective. Focus on quality and projects that stand out may become even more important," Aure believes, speaking on behalf of Bonum.

Unsold homes increasing

"There are now 4,000 unsold homes in Oslo on Finn.no, this is the highest number ever. On average, around 1,500 homes are sold each month, so clearly the high supply affects housing prices," she emphasises.

Bonum believes supply will remain reasonably high for quite some time ahead, as completion of new housing projects will increase over the next two years.

"In a slower market, some projects will be put on hold pending sales. This will help stabilise supply, and will in isolation be positive for housing price growth," she explains.

"Bonum has a long-term perspective on the housing market in Oslo, and believes that even though we now see some decline in the market, we at Bonum believe in positive development over time," Aure concludes.