A more stable Home Buying market in sight in Norway

Av: Dato: English

Once again, I’d like to share some exciting news with you English speakers regarding the developments in the housing market, especially in light of the sales figures for February that were released a a week ago.

There might be an excessive focus on price developments, but as a buyer, it’s important to keep an eye on prices to make an informed decision about whether to buy a property now or wait.

To address the latter first, based on the current situation, there are no indications that waiting for a price drop would be beneficial in the future if you’re looking to buy. My advice is to check the available properties and make a purchase when it suits your life situation.

We’re no longer in a buyer’s market, but the consolation is that if you have a property to sell to finance a purchase, you can be more confident that your investment might be profitable in the future.

Here are some key figures from February:

  • Housing prices rose by 1.4% nationwide.
  • Housing prices have increased by 4.9% so far this year.
  • The growth over the past 12 months has been 1.5%.
  • The average time on the market is 65 days compared to 35 days in the same month last year.
  • The inventory of unsold homes has decreased.

I’m looking forward to an exciting spring in the housing market and am eager to hear from you if you need some guidance on your journey toward a successful purchase. 

Best regards
Boligdama – Trude Larsen
trude@boligdama.no
+47 950 37 330

 

 

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The home buying market can turn at any time

Av: Dato: English

We find ourselves already halfway through January, with the country covered in snow and experiencing proper winter temperatures. Real estate sales are in full swing, and I’d like to share some insights I’ve gathered so far.

It seems that the housing market has gained new momentum compared to the fall. Buyers are showing greater interest, and I have even experienced bidding rounds on several of the properties my clients are interested in. Real estate agents also report increasing activity, and although they sometimes tend to be overly optimistic, there seems to be a good amount of truth in their observations.

January traditionally sees a boost in real estate market activity. Additionally, we have reached the peak of the interest rate curve, and a decrease in interest rates is expected at the next change by the Norges Bank. When in 2024 this will happen is still unclear, but it at least provides potential homebuyers with predictability when planning their home purchase.

Throughout last fall, I spoke about being in a buyer’s market. There was a good supply of homes, low demand, cautious buyers, and falling prices. Despite this, the sales volume fell due to economic uncertainty. I am very uncertain about whether this strong buyer’s market will persist, but at the same time, some of the uncertainty factors have been cleared away.

Regardless, my advice is not to wait too long for your home purchase. We expect the market to turn around in 2024, but the timing is uncertain. Experience shows that changes happen quickly when they do occur, so it might be wise to start your home search early in the year.

We need to wait for the January figures to have a clearer understanding of the market direction, but these are my best assessments so far.

I wish you a continued fantastic start to the year. Feel free to contact me for a non-binding digital meeting regarding your home purchase. Together, we can plan a strategy to make the most of the market.

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Is it wise to buy a property that lacks approvals from the building authorities?

Av: Dato: English

Many properties for sale lack public approvals, such as the use of rooms for permanent residence or unapproved rental units. Is it wise to buy such a property?

If rooms or additions in a house are not approved, this should be specified in the sales material. Unfortunately, this information is not always clear and might be formulated in intricate ways. If you come across such formulations or phrases you don’t fully understand, it should raise a red flag. Are there unapproved rooms here? This often pertains to basement living rooms and similar spaces, which may lack approval due to small windows or not meeting safety requirements for escape routes and fire safety.

In the new regulations of the Sales Act and the prescribed condition reports that came into effect on January 1, 2022, these issues are addressed more explicitly, and illegalities are required to be disclosed, both by the real estate agent and the appraiser. However, the presentation and ease of detection vary widely, so it’s crucial to be vigilant and perhaps ask the real estate agent additional questions.

Unapproved rental units

Then there are rental units that are not approved but are still being rented out. Is it really that bad? The previous owner has been doing this for years without consequences. Yes, it can be problematic even if municipal building authorities are not enthusiastic about inspections. You could face fines of up to NOK 200,000. As the buyer, you assume all risks related to any illegalities in the property, including unapproved changes such as extensions, non-approved additions, and basement rooms for rent.

Whether the seller has informed about these illegalities or not doesn’t matter much. If you receive fines from the municipality, you will have to deal with the seller and possibly the property insurance company afterward.

It can also be dangerous to rent out rooms that are not approved for permanent residence. According to lawyer Morten Fæste, renting out parts of your own home requires approval from the municipality for the intended use. It’s not just illegal but can be directly hazardous. Rooms for permanent residence must meet stricter requirements for escape routes and fire safety than other rooms in the house.

The best scenario is to rectify the deficiency before sale

Ideally, the seller should address the issue before putting the property up for sale. However, this can take time and money, and sellers may choose to sell the property with illegalities instead. In theory, this should affect the price, but that is not always the case.

As a buyer’s advisor, I, like Consumer Authorities, would advise against buying a property with unapproved conditions. If you do, make sure you understand what the issues are, what it would cost to rectify and seek approval, and whether such approval could be obtained at all. And most importantly, ensure that the additional work and costs are reflected in the price you pay for the property.

Be especially cautious if you intend to use the unapproved rooms for rental purposes.

Why is it allowed to sell properties with unapproved rooms and additions?

Many in the real estate market, including myself, wonder why it’s legal to sell homes with unapproved rooms and additions. Could a rule not be implemented that all properties for sale must be 100% approved, period?

The reason is that building authorities do not have the capacity to inspect all homes, whether lived in or listed for sale.

In single-family homes that are not brand new, you will almost always find that changes have been made since the house was built. This is likely noted in the Condition Report from the Appraiser. Some changes can be significant and undesirable to assume the risk for. Other conditions may have less significance and can be lived with.

You should consult with me about this before placing a bid to avoid taking on unnecessary risks related to illegal conditions in the property.

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The housing market in 2024, update from Boligdama

Av: Dato: English

When we soon bid farewell to 2023, we can reflect on a year of uncertainty in the housing market in Norway and a global situation that has kept the world on edge. But, as always, life goes on, and for some, that means planning to buy a home.

For those of you who have considered buying a home but put it on hold for a while, 2024 might be the year when the dream becomes a reality. It depends on how stable and predictable the situation feels for those in search of a home.

2023 has been marked by delays and fewer home purchases, primarily due to rising interest rates and uncertainty about home sales. The banks’ tighter lending policies and increased living costs have also made it a challenging time for many.

Even though it has been a buyer’s market with lower prices for a while, we have seen fewer buyers in the game. The fall has been quieter than usual, as I have also noticed as a home purchase advisor, with fewer inquiries.

When prices rise, and bidding rounds become intense, interest in securing the dream home increases. That’s understandable but also a bit paradoxical when we consider the opportunities that may arise when prices fall.

For those with tight finances, my advice is simple: “Hang in there” and avoid further financial exposure.

The peak in interest rates has been reached, but uncertainty and price declines are likely to continue into 2024. The inventory of unsold homes is decreasing, and fewer people are putting their homes up for sale. If this trend continues, the housing market could quickly turn again, with more competition for homes.

For those with flexibility, the first half of 2024 could be a time for good home purchases. The buyer’s market will still offer opportunities for good prices and a good selection of homes for sale.

Some experts predict that home prices may start to rise, especially in larger cities, early in 2024. I’m not so sure that will happen, but we have to keep an eye on it and see what unfolds. What is certain is that the housing market often changes rapidly, so if it takes off, there could be increased demand and higher prices again.

I have the tools and knowledge to help you save several hundred thousand in bid negotiations if you dare to take the plunge!

Precise general advice is challenging to give in these times. But if you’re wondering what’s wise for you, I’m available for non-binding digital meetings.

Wishing you a continued pleasant holiday season and a HAPPY NEW YEAR!

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