DNB believes in house prices in the coming years – HegnarOnline

Norway’s largest brokerages On Tuesday presented a fresh forecast for the Norwegian economy. Where updated estimate for this year house prices sharply, from 2.1 to 5.7 percent. But towards the end of the year comes a cover, think DNB Markets.

– We have assumed that the authorities come with a “housing market package” that reduces house prices by a total of 4.5 per cent over three years, writes brokerage .

– It draws prices slightly down, but there is not much drama in this, says senior economist Kyrre Aamdal DNB Markets.

Broker house model provides declines over the next three years as a result of increased unemployment and gradually rising interest rates.

Looking at measures

Both Treasury Siv Jensen (FRP), FSA and estate agents have recently expressed concern that growth in house prices and debt in Norwegian households is not sustainable over time.

Finance Authority has therefore presented a proposal for tighter bank lending practices. These are out for consultation with a deadline of May 4.

Jensen alerted when measures came, she works together with several other ministries to reach a “broader set of measures” to stabilize the situation on housing market.

– Measures on both the supply and the demand side is concerned, she said.

Low interest long

Also clean development means much of the housing market. DNB Markets hold on his forecast that Norges Bank will cut interest rates twice this year, but now believe it will go more time before the central bank raises key interest rate.

Norges Bank will raise interest rates with 0.25 percentage points first in 2018, think brokerage. Bank surprised most with keeping the interest rate unchanged at 1.25 percent in March.

DNB Markets point to lower wage growth and inflation, low GDP growth, lower interest rates abroad and moderate inflation in the housing market as factors pointing in the direction of low interest rates in the future.

Lower wage growth

Otherwise keeps DNB Markets largely on their projections from January when it comes developments Norwegian economy.

– All in all, there are no major changes in the projections. Low growth this year, which is gradually picking up ahead. Unemployment will rise, but it is not dramatically high – we reach the same levels as we had in 2005, says Aamdal.

A small change in the forecasts made as a result of pay increases were 3 , 1 percent against the estimated 3.5 percent.

– This year negotiations have a limit of 2.7 percent. We now estimate an increase of 2.7 percent this year and lower wage growth throughout the period, says Aamdal. (© NTB)