Home Buying Equity – It takes more to buy a second home



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This is indicated in the bank’s query response to the new mortgage regulations, which will come into effect from the new year, writes Dagens Næringsliv.

The consultation period expired on Tuesday.

As long as we have zero interest

As long as we have zero interest

Will relieve price pressure

“A high equity ratio when buying a secondary home can help reduce the risk that investors will sell secondary homes in a recession and thereby amplify a drop in prices,” writes Norges Bank.

In Oslo, three years ago a requirement of 40 percent of share capital was introduced for the purchase of a secondary residence, while the requirement is 15 percent for the purchase of a primary residence.

Norges Bank believes this has led to fewer people using the home as an investment object, which in turn has eased pressure on prices.

TIPS FOR EXPERTS: Consumer economist Cecilie Tvetenstrand gives advice to you who are a first time buyer. Video: Cecilie Tvetenstrand.
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You must apply in several cities

And furthermore, this speaks in favor of allowing the capital requirement to also apply in other areas that may be attractive to investors in the secondary housing market, for example near Oslo, according to the bank.

The central bank believes that the requirement will have “modest consequences” in areas with less pressure in the housing market.

Get enough capital ASAP

Get enough capital ASAP

Disagree with others

Nordea believes the proposals may also ease pressure on house prices in Bergen, Trondheim and Tromsø.

Eiendom Norge claims that the capital requirement for Oslo has played its part, because the sharp rise in prices in 2017 was affected by many investors and therefore should not be extended to other parts of the country.

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