The Norwegian real estate market appears to have climaxed as statistics from Eiendom Norge reveal dwindling prices for three consecutive months dropping 1.2% in July as opposed to June.
Oslo saw an unusually sharp decline of 2.8%.
“In recent months the housing market has seen a sharp decline in prices in Oslo, which has affected the statistics on a national level,” announced CEO of Eiendom Norge, Christian Vammervold Dreyer.
He disputes that the depressed prices are due to an oversaturation in stock, with no apparent end in sight.
“This is something we think will be characteristic of the market in upcoming months as well,” Christian Vammervold Dreyer announced.
In Sweden there is a concern about a likely housing balloon — real estate rates rising by 40% in the past three years — and with newly imposed stricter policies on amortisation.
“There is fear that there will be a repeat of what’s happening in Norway, with a weaker real estate market in Sweden as well, as further amortization regulations are at the door,” DNB Markets analyst Simon Mortensen tells Direkt.
The Financial Supervisory Authority of Sweden planned to force a cap on household debt quotas in May. Families with more than 4.5 times their yearly income in debt would be required to amortize 1% more than the one currently asked.
According to OECD, the Nordic nations have some of the biggest levels of household indebtedness to disposable income:
Denmark at 293%
Norway at 222%
Sweden at 178%
The European Commission cautions in a news from May that the Swedish real estate business is overpriced and that there is a risk of drastic effects on the economy. The committee also advises that there is a comparable situation in Denmark.