During Monday comes FSA with their advice on how the move in the housing market can be slowed. The recommendations are scheduled public Tuesday morning.
There are Treasury Siv Jensen has asked FSA propose measures. The past year has Norwegian house prices increased by 8 percent.
In Oslo sold 8 of 10 apartments currently over valuation, according to DNB Property.
Only countries with high house prices
While many housing markets in the world got a fierce cold shower with the financial crisis, the Norwegian housing prices still skyrocketing. No western country is near to have had the same house price inflation as Norway for the past 20 years.
Yet fear Finance Norway that it becomes unfortunate grip, grip which can also be counterproductive.
– Norwegian consumers withstand a rate increase. Many have a strong financial position, said head of Finance Norway Idar Kreutzer.
He said that people in recent years have been good to save.
Fears price decline in housing
At the same time he understands that the Ministry of Finance requesting measures against developments that take place.
– The combination of low housing construction, high price in the housing market and low interest rates can be a demanding cocktail, which builds up risk market, says Kreutzer.
– Also you fear a housing bubble?
– We do not use that word. But there is a risk of future price declines in housing, says Kreutzer.
Believe it built too few homes people can afford
– The fundamental problem in the housing market is that it is too small access to build clear land, and that the homes being built in urban areas are too expensive for many, says Kreutzer Aftenposten.
– Lange planning processes and new and high standards for the quality of housing, such as environmental and universal design, contributes to animal housing and high costs for them to buy, he said.
– What measures are you are skeptical?
– Finance Authority more opportunities, he says and rattles off:
- – They can set stronger capital requirements for banks, meaning that one must have more equity for every dollar they lend. We think that it might negatively, by making it harder to lend to small and medium enterprises. It again will reinforce challenge for Norwegian industry.
- – They can also introduce new requirements for mortgage by cutting the payback period, as recently done in Sweden. But Sweden is the repayment period up to 40 years in Norway is it at around 20. We have already requirement faster repayment here.
- – A third measure could be to introduce stricter solvency of those who shall loan, due fall in interest rates in recent years. Today they withstand an interest rate increase of five percent. But here’s banks and governments in the same boat. Nobody wants a situation where customers can not pay down their loans.
– Banks should be more stringent than the government
– How will Finance Norway propose to achieve the objectives, in inasmuch as you also want to slow down in the housing market?
– We encourage banks to make good and thorough risk assessment, often beyond the requirements of the authorities. This applies both repayment and ability to withstand an interest rate increase, says Kreutzer.
He has also a warning to today’s homebuyers.
– For a long time one could expect an increase of housing you have purchased. This, combined with low interest rates, has led many to stretch far during the betting rounds. But today we discourage having unrealistic expectations of future price increases.
– You do not think prices will continue to rise?
– No.
– They will sink?
– There is nothing to suggest that we are facing a significant fall in house prices. But we must expect a lower inflation. It is important that buyers take into consideration, says Kreutzer.
Finance Norway represents the financial industry in Norway. The organization was previously Finance Norway, after a merger of the Savings Banks Association and Financial Services Association. From 1 January last year was also Financial Services Employers’ Association part of Finance Norway.
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