Lower activity in the housing market
"The activity in the housing market has gone down since actions against the coronavirus were introduced in Norway," says Henning Lauridsen, CEO of Real Estate Norway.
Real Estate Norway, in collaboration with Eiendomsverdi AS, has extracted numbers from the turnover in the housing market so far in March 2020.
Fewer sales, but still decent activity
The data show that the activity in the housing market was normal until Thursday. Last weekend there has been lower activity than normal, but new homes are being sold and put out for sale.
There are as many homes available in the market at the end of last week as it was at the same time last year.
Price /asking price ratio fell towards the end of the week.
Activity in the market is a necessity
The data shows that the effect many predicted, when the measures against the corona became known Thursday last week, has happened.
- In our view, this is not unexpected, as the actions place considerable restrictions on the freedom of movement of Norwegians in society, says Lauridsen.
- At the same time, it is important to emphasize that the housing market has not yet fallen asleep. We also believe that there will be a need for some activity in the housing market, even if we fight the virus, says Lauridsen.
The housing market is important
- Real Estate Norway's measures last Friday in the housing sector were established to continue to maintain activity while the outbreak is ongoing. This is important because home sales and home purchases are something that is planned long in advance. The financial crisis taught us that the housing market is a very important component of the economy, because much capital is tied up here, and in Norway perhaps to an even greater extent than many other countries.
- It is therefore very important that we do not now repeat the problems in the housing market during the financial crisis, where the liquidity dried up. Many families and individuals are in a home-exchange and middle-financing situation now, and we must make sure that they get the best possible home exchange while fighting the virus. In addition, there is always someone who needs a new home because they are divorced or have to move because the lease expires, Lauridsen concludes.
Data must be treated with caution
Real Estate Norway emphasizes that the data must be treated with some caution, as the housing market in March and April is largely influenced by how Easter falls. Usually, many homes are put up for sale only after Easter, which marks the so-called spring flood in the housing market.
This is a seasonal pattern that has taken place over many years in Norway.