– Fasten seat belts – E24

– It’s just a matter of fastening your seat belts, Geving tells E24.

In Norway, house prices tend to fall in autumn. But in September, which is historically a weak month, prices rose 0.4 percent this year. This was demonstrated by the new brokerage industry report on Monday.

– These figures are stronger than expected, says chief economist Kari Due-Andresen at Handelsbanken at E24.

Prices have also skyrocketed in the capital. Here, the average home is now 7.7 percent more expensive than at the same time last year. He is a national leader.

Concern for the ‘Oslo cocktail’

But Oslo’s growth will be more pronounced, believes Geving, who is a director of the Norwegian Real Estate Association (NEF).

– There are many reasons to fear an abnormally strong price development in Oslo in the future. September is usually a weak month, but it was the opposite. I also believe that October will be unusually strong, says the leading broker.

He believes Monday’s housing report shows that Norges Bank’s key interest rate cut to zero percent remains a major pricing factor.

– Some have thought that the interest rate effect has been removed from prices, but there is no reason to believe it. Demand is now very strong and driven by interest, Geving believes.

– Oslo already had a supply deficit and zero interest rates have full effect on that market. It’s a very strong cocktail, says the lead broker, who fears Oslo prices will only continue to rise this fall.

Chief Economist: Regulatory Tightening Will Slow Down

Due-Andresen believes it is too early to respond to Geving’s warning.

– House prices are volatile from month to month so I want to wait before concluding that Oslo has started a longer trend with abnormal price increases, says the chief economist.

– At the same time, is there no prospect that the historically low policy rate will increase immediately?

– No, and it is probably quite true that the whole effect of the interest rate cuts has not yet been eliminated on prices. In isolation, this can further boost house prices in the future. On the other hand, mortgage regulations will be tougher from October, says Due-Andresen.

He points out that the government has now eliminated the so-called “crown exemption”, which gave banks the opportunity to grant up to double the number of mortgages that did not meet the main requirements of mortgage regulations.

– I think that the evolution of house prices is slowed by this adjustment, says the chief economist.

I do not agree with the result of the interest rate

Unlike Geving, Eiendom Norge CEO Henning Lauridsen, who presented the new housing figures on Monday, is not as concerned that Norges Bank’s zero interest rate will continue to drive home prices.

– No, we believe that the effect of the interest rate has been mainly eliminated, so this is not a strong driver in the future, Lauridsen tells E24.

Eiendom Norge has forecast flat or negative price developments in the housing market this fall.

– Does this forecast hold, given that September was so strong?

– We have the same opinion in the future, although September surprised us. In August, we saw a flattening and we expected this development to continue.

– Why do you think the development did not continue?

– I think it’s about the large volume of sales, driven by strong demand. But we probably won’t get the same volume in October, Lauridsen believes.