Housing prices flatten out

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A decline in the numbers of prospective buyers attending open house showings, and a rise in what brokers call “buyer selectivity,” seemed to finally lead to a slight decline in Norwegian residential real estate prices last month. After years of constantly rising, sellers are now being told to have more “realistic” price expectations.

Demand for housing remains high in many areas of Norway, especially Oslo and Stavanger, and many are advocating more construction – but not only of expensive units like those rising along Oslo’s waterfront. PHOTO: newsinenglish.no

Average prices for single-family detached homes rose again in September, by o.7 percent from August, while average prices for leiligheter (condominiums) and andelsleiligheter (units in a cooperative) were down 0.7 and 1.2 percent respectively. Housing prices overall slipped by 0.3 percent nationwide, with only the Oslo and Stavanger areas showing slight increases.

“Lots of people have thought for a long time that everything is being sold over appraisal,” Terje Buraas, lead of the national real estate brokers’ association EFF, told newspaper Dagens Næringsliv (DN). “It’s not.”

Buraas, who also is director of the large real estate firm Postbanken Eiendom, stressed that the new numbers released this week “confirm that price development in the housing market, after the strong increases in the beginning of the year, has been moderate.” Average prices are still well above levels for the same month last year, but the degree of acceleration has tapered off.

Many brokers now think the Norwegian housing market, fueled by the country’s still-strong economy, is heading into a “calmer” period. Neither Buraas nor his colleagues at EFF think prices will continue to rise at a rate of 7-8 percent annually until 2015, like state statistics bureau SSB forecast recently.

“That’s too much,” Buraas told DN. He’s telling sellers to be more realistic and he thinks buyers are now more controlled. New down payment requirements for banks seem to have cooled the market, and the active bidding for property during the past few years has calmed down as well.

Broker Tormod Boldvik, also a director of EFF, said sales activity in September was weaker than he’d expected, “but it’s normal and healthy with moderate price development,” he told DN, adding that the market was more “selective.” He said it’s no longer true that homes sell quickly either, and sellers must realize that when listing their homes.

The average price per square meter on a nationwide basis was NOK 30,400, up 7.3 percent from September of 2011, according to EEF.

Views and News from Norway/Nina Berglund

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