– We see that it takes longer to get satisfactory sales so that we get financing to start construction. Nordr’s metropolitan director, Anders Teodorsen, says it is far more demanding to sell enough apartments to get new projects started now than it was a couple of years ago. Photo: Jørgen Pettersen / news This is what Trondheim metropolitan director Anders Teodorsen of the housing construction company Nordr says. They are among the companies in this country that build the most homes. But after many good years with low interest rates and rising house prices, they notice that things have turned around. This week, management decided to lay off 20 percent of its employees. This means that between ten and twelve employees will lose their jobs. – Times are tougher, and the industry benefits a little from that. It’s been a long time since the last time, and it may have been a little too simple, a little too long, said director of Nordr, Andreas Martiniussen to Finansavisen. – The sales volume has decreased quite significantly from 2021, which was a peak year, back to the 2019 level, says Teodorsen Nordr has, among other things, been behind one of the largest housing projects in Trondheim in recent years. In Lilleby, hundreds of workers have been busy building the new district. But now it is much more difficult to sell, and they have to downsize in Trondheim. – It is very boring. We are making organizational adjustments which mean that we will lose a couple of skilled employees, says Teodorsen. Housebuilders are afraid that plans for new housing will have to be put on hold as a result of people not wanting to buy new ones. Photo: Jørgen Pettersen / news Save to buy A total of around 400,000 people work in the construction industry in Norway. Not since 1999 have fewer construction projects been started than in the third quarter of 2023. So far, the construction of 45 per cent fewer homes has been started this year compared to last year. Director of the Entreprenørforeninga in Trøndelag, Audun Otterstad, says property developers throughout the country are having a tough time these days. Photo: EBA Trøndelag According to figures from the Norwegian Building Industry Association, the number of bankruptcies has increased by 30 per cent this year. Companies that have sent out layoff notices have increased by 400 per cent compared to the same period last year. They state that they are now working continuously to help companies with downsizing processes. – The building and construction industry is the industry that feels the times we are in the toughest of all. There are forecasts that say we could lose as many as 30,000 man-years if there is no replenishment of assignments, says director Audun Otterstad of the Entrepreneurs’ Association in Trøndelag. He says the industry is affected by the rise in the price of goods, a weak krone and that there are fewer people buying homes at the moment because of the interest rate. – It is especially those who specialize in housing who find it particularly tough. There is more than a halving in initiations. No new projects will start, says Otterstad. Fears of price explosion In September, Norges Bank raised the key interest rate to 4.25 per cent. At the same time, Central Bank Governor Ida Wolden Bache announced that interest rates could be raised by another 0.25 percentage points in December. General manager of Varmbo, Christoffer Johnsen, believes there is still a need for new homes in the cities. But that many are sitting on the fence and waiting because of the rent. Photo: Jørgen Pettersen / news Several home builders news has spoken to believe that few new homes will be built as long as people are unsure whether rents will continue to rise. – I think we will see a flat development in housing sales until the summer of 2024. Then there will be a recoil in the housing market during 2025 when you look at the low number of starts in the housing market right now, says general manager Christoffer Johnsen at housing developer Varmbobygg. The Entrepreneurs’ Association believes that the big cities in particular will be affected by the price rise. Far more people are moving into the cities than are being built. – There will be more people on the move when more people will start buying when interest rates gradually fall. Then prices will rise unfavorably much, says Otterstad. – Then you get a price spiral because there is too little supply in the market, he continues. Housing is still being built in the big cities, but due to low sales of new housing this year, there will be very little construction in 2024. Photo: Jørgen Pettersen / news
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Crisis in the construction industry – several go bankrupt and many have to make layoffs – news Trøndelag – Local news, TV and radio
