House prices are expected to grow by 13.1 per cent this year and a further increase of 3.8 per cent next year.
This is an upward adjustment from the forecast in May, which was 11.2 and 3.1 per cent, respectively.
– The progress in the housing market is expected to slow down in light of the temporary effect of the corona pandemic on housing demand, as well as high price levels in certain areas and slightly higher mortgage rates also dampen demand, the report states.
There has been high speed in the housing market during the corona outbreak. From several sides, the government has been urged to take action so that the market does not overheat.
Before the summer holidays, the Systemic Risk Council, which has been set up in the world to keep an eye on risks in the financial sector, called for access to interest-only loans to put a damper on the market.
However, it was rejected by the government.
In the Economic Report, emphasis is placed on the fact that development is rapid, but that there are not the same danger signals as in the time leading up to the financial crisis.
– Recent increases in house prices give rise to increased vigilance towards developments in the housing market. Seen for the country as a whole, however, the course during the corona crisis differs significantly from the course up to the financial crisis.
– The growth in house prices has been strong, but not quite as strong as in the 2000s. This also applies to house prices relative to disposable income, it appears from the Financial Statement.
It is also emphasized that the housing burden – how much of household income goes to cover housing costs – has only increased marginally, while during the financial crisis there was a sharp increase.
Among other things, this must be seen in the light of the fact that interest rates on home loans are significantly lower than up to the financial crisis.
Finally, households’ total debt to banks and mortgage-credit institutes in relation to income has been at a stable level – in contrast to the strong growth leading up to the financial crisis, the report states.
Source: The Nordic Page