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When the crown crisis hit Norway in mid-March, central bank governor Øystein Olsen and Norges Bank used one of the most powerful tools they have: the zero interest rate.
In June, Norges Bank predicted that it would not raise it again until the end of 2022. But after a hot housing market this summer, there is great tension over whether the forecasts will change when the central bank governor announces the new forecasts Thursday.
According to the recent Housing Market Barometer, published monthly by the Norwegian Housing Association (NBBL), more and more Norwegians believe that Olsen will raise interest rates over the next year.
The share that believes in higher interest rates has risen from 38 percent in August to 51 percent in September.
– Much of the economy has recovered faster than expected, which speaks to a faster rise in interest rates than Norges Bank has anticipated, says Chief Economist Christian Frengstad Bjerknes at NBBL in a press release .
You think house prices are going up
At the same time, the proportion who believe in a rise in house prices increases from 49 to 54 percent. Seven percent believe home prices will fall next year. The housing market barometer measures the temperature in the housing market, and due to the significant increase in the proportion that believes in rising interest rates, the barometer falls from 22.1 to 18.9 points.
– More and more people believe in rising house prices, but at the same time we see a progressive malaise over higher interest rates. The latter weighs more and contributes to the barometer falling for the first time since April, says Frengstad Bjerknes.
It is especially in Oslo where people think prices will go up. Here the turnout is 75 percent.
– The low start-up rate in Oslo is worrying. Politicians and home builders should get together and find out where the blow hits, says Frengstad Bjerknes.
Don’t fear unemployment
At worst, 400,000 were registered as unemployed during the crown crisis this spring. Since then, the number has dropped dramatically and at the end of August, 122,200 were registered as completely unemployed. Although unemployment is higher than before the pandemic, only five percent fear losing their jobs.
According to NBBL, this is an important key driver for the housing market. A person who is afraid of losing her job will put off buying a home.
– With zero interest rates and little fear of losing their jobs, there is little sign of a drop in house prices, says Frengstad Bjerknes.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
