– I’m a little scared of having to go back to spaghetti and oatmeal, says IT consultant Jonathan Midttun (23), on his way out of an apartment tour in central Oslo. Going forward, it is not only high square meter prices, but also rising interest rates, that threaten the budget and housing dream of Jonathan and other first-time buyers. At 10 am on Thursday, Norges Bank will issue its interest rate ruling for June. Many people are wondering whether the central bank, for the first time in 20 years, will raise interest rates by 0.5 percentage points, twice what is a normal interest rate change. – Rising interest rates are a bit scary, they make me consider renting, rather than buying. But everyone around me says that it’s just a matter of getting into the housing market, Jonathan continues. He has been saving for a home purchase for two years. During the same period, property prices have risen sharply. The number of first-time home buyers in Norway fell in the first quarter of 2022, for the first time since 2017. In Oslo, there have never been fewer people buying their first home during the first three months of the year, since registrations began 14 years ago. It shows new figures that Samfunnsøkonomisk analyze has prepared for Ambita and the Norwegian Real Estate Association. – Prices have risen a lot, especially in the big cities and especially in Oslo. In addition, interest rates are rising. This weakens the purchasing power of first-time buyers, says Carl O. Geving, CEO of the Norwegian Real Estate Association. Managing Director Carl O. Geving of the Norwegian Real Estate Association. Photo: Johan B. Sættem At the same time, the figures show that a larger proportion of those who buy a home for the first time, buy it together with others. NEF believes this is due to the fact that both house prices and mortgage rates have risen. – With the prospect of a significantly more brutal interest rate development, I think it will weaken first-time buyers’ ability to enter the housing market. It simply looks darker for first-time buyers than it has been in a few years, says Geving. Minister of Local Government and District Affairs Sigbjørn Gjelsvik (Sp) is responsible for housing policy in the government. He promises no quick fix, but says that the government takes the challenges in the housing market seriously. In the new report to the Storting on housing policy, the use of instruments in the Housing Bank will be assessed, among other things. Minister of Local Government and District Affairs Sigbjørn Gjelsvik (Sp) Photo: Lise Åserud / NTB The Ministry will also look at the experiences from new home purchase models, such as «rent to own», where the home buyer can rent the home and later eventually become the owner. – The housing report is ready in just over a year and a half. This is important and extensive work where we will both facilitate a better functioning property and rental market in the big cities, says Gjelsvik. He says that the housing report will also include the challenges in the districts, where the problems are different than in the cities. Due to low demand for housing, it is often impossible to sell a newly built home for anything close to the construction cost. Therefore, it can be a challenge that those who want to build new homes do not get large enough bank loans for the housing dream to be realized.
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Fewer first-time buyers and higher interest rates – news Norway – Overview of news from different parts of the country
