tag:blogger.com,1999:blog-515427400466373176.post4610898654749472414..comments2019-09-03T07:51:27.469+02:00Comments on The Norwegian Bubble: Norwegian Housing Market: What To Expect In 2015Antti Jokinenhttp://www.blogger.com/profile/04778440661520118404noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-515427400466373176.post-4261679317507705752014-12-17T11:01:09.461+01:002014-12-17T11:01:09.461+01:00Hello Antti, I appreciate your blog, good to see s...Hello Antti, I appreciate your blog, good to see some contrarian analysis. I live in Norway now, used to live in Australia. I see some similarities, in that Australia has been riding on Chinas back with huge increases in their terms of trade with the mining boom, which is now starting to unwind. Also Australia may have have even higher home prices than Norway! I was convinced prices would fall, but they have just kept going up!<br />I think whatever government is in power they will not want to see any home price decline on their watch.<br />On the Krone, I have been bearish on the Krone since I cam to Norway 2 years ago, it just seemed too expensive, and if any readjustment (away from oil) has to take place then it needs to fall as wages are notoriously sticky - look how difficult it has been for the peripheral EU countries (Ireland,Spain, Greece) to readjust to compete with the likes of Germany. <br />On interest rates: people I spoke to seemed to believe that interest rates were inevitable going to rise soon, I was never convinced and thought it would go the way of the US and UK with lower rates for much longer than people anticipated. Long term expectations of interest rates will have a stimulatory effect on lending, especially for houses. On a 3MNOK mortgage over 30years, the difference between 3% and 6% mortgage equates to a saving of 2MNOK interest repayments. <br />As for stimulating the economy in a downturn, well infrastructure is a good one, but I would hope that we reduce the corporation tax for non-oil sectors, attract businesses to set up in Norway. <br />Predicting the oil price seems to be a mugs game, but from what I can gather it looks like Norway has to compete with US shale oil, so that seems to be the big question at the moment, what are the breakeven prices for US shale oil? Is it about to unwind with defaults on energy bonds (turns out the emperorer had no clothes)? Or will they improve the economics of shale oil drilling and it continue to increase supply.....Alberquerque Economicshttps://www.blogger.com/profile/03778958826438342024noreply@blogger.com