Housing prices tumble again

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The latest statistics for housing sales in July, released on Thursday, showed another overall decline of 1.2 percent from June. In Oslo, the decline was the steepest ever registered for the month of July, but Finance Minister Siv Jensen calls it a “natural cool-down” after years of an overheated market.

Housing prices here in Tromsø were relatively stable, but still up 4.8 percent from last July. PHOTO: newsinenglish.no

“Just last year everyone was concerned about how high prices had risen, and that young people could no longer afford to buy a home,” Jensen said at a meeting with foreign correspondents in Oslo on Thursday, just before the numbers were released. She noted how she and many other Norwegians have enjoyed years of major gains on their housing investments.

“It would be selfish of my generation not to allow the market to cool down,” Jensen said, stressing that the housing price decline is “not a problem.”

The conservative government in which she serves, now running for re-election, contributed to the cool-down by introducing legislation that has boosted lenders’ capital requirements and not least those for buyers of second homes. The goal was to curb investor speculation and it worked, with many investors disappearing from the market. At the same time, a building boom in many cities including Oslo has boosted supply. Jensen also noted how the law of supply and demand is clicking in not least in Oslo.

Prices in Oslo are falling the most and are now 7.1 percent lower on average than they were in April. Most sales now are at prices below appraisal, but they were still 6.4 percent higher than last July.

Prices declined just 0.6 percent in Bergen, Tromsø, Stavanger and Kristiansand, but registered annual growth of 4.8 percent in Tromsø, for example. Sales have leveled off as well, with 50,313 homes sold so far this year nationwide, compared to 50,450 in the same period last year.

There also have still been some spectacular sales at record-high prices, including a home in Oslo’s fashionable Gimle neighbourhood in the Frogner district that recently sold for NOK 76.4 million (USD 9.5 million). DN reported that the buyer was Pia Øien Cohler, a 33-year-old Norwegian married to the billionaire American technology investor Matt Cohler and living in San Francisco.

newsinenglish.no/Nina Berglund