tag:blogger.com,1999:blog-515427400466373176.post8944530302465057955..comments2019-09-03T07:51:27.469+02:00Comments on The Norwegian Bubble: What Really Is Going On In NorwayAntti Jokinenhttp://www.blogger.com/profile/04778440661520118404noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-515427400466373176.post-47467154026397086342015-06-27T16:58:09.859+02:002015-06-27T16:58:09.859+02:00Have you discontinued this blog? I would sure like...Have you discontinued this blog? I would sure like your opinion on recent events.. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-515427400466373176.post-61401275931244671712015-04-20T14:23:42.182+02:002015-04-20T14:23:42.182+02:00Thank you so much for writing this blog. I am quit...Thank you so much for writing this blog. I am quite skeptical about the Norwegian housing market and I still haven't taken the plunge to get into it despite strong encouragement from every Norwegian I know.<br /><br />Best regards,<br />HDAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-515427400466373176.post-48065193219761757712015-03-10T01:57:26.809+01:002015-03-10T01:57:26.809+01:00GGMD adds a viewpoint: If you look for parallels t...GGMD adds a viewpoint: If you look for parallels to the US subprime it is not that hard to find:<br /><br />http://www.dn.no/privat/privatokonomi/2015/01/20/0949/mange-tler-ikke-en-eneste-rentekning<br /><br />23% of all housholds owing their own home can barely or not at all handle a single increase in the interest rates!!!<br /><br />This survey was released mid-January 2015.<br /><br />Simple logic gives me the following correlation: The households with the most uncertaint jobs are also the ones with the highest leverage (its always that way).<br /><br />Wonder if these households can afford to serve their debt if unemployment strikes....<br /><br />Also: With the decline in inflation and real income growth which will be the new normal for the remaining of this decade, the principal wont decline as fast as the last 20 years. The effect of this is that the liquidity in the marked declines substantially as more people have to amoritize longer on their loans as the income/debt ratio dont decrease as fast as we seen since the early 90ies. Further more; If prices dont increase as rapidly as "normally", the liquidity in the marked will decrease further.<br /><br />As the basic rule of thumbs tell: Less liquidity equals declining prices.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-515427400466373176.post-26849013733791783602015-02-16T14:44:46.717+01:002015-02-16T14:44:46.717+01:00Hi, Sarmad!
Jeg har vært i Norge i fem år, snakke...Hi, Sarmad!<br /><br />Jeg har vært i Norge i fem år, snakker norsk ganske ofte og skjønner nesten alt i skriftligt form. Men jeg skriver helst på engelsk når det er snakk om økonomi -- ikke minst fordi vi mennesker knytter ofte dårlige språkkunskaper sammen med litt lavere IQ. Det er selvsagt feil gjort, men jeg har selv gjort samme feil før (though mostly unconciously) og tar dermed hensyn til det :-)<br /><br />To your questions:<br /><br />1. I think there is room for Norwegian home prices to drop even 30-40 % during the next 5 years. It doesn't mean that they will do it. The outcome is not for anyone to know, especially as it is very much connected to the currently very uncertain outlook for world economy. I have made it clear from the start (see my very first posts) that what will happen is ultimately not in the hands of Norwegians. Local authorities can affect the outcome, but not control it. I'm currently pessimistic on the behalf of the world economy. My main interest lies in understanding the world economy -- from a "macro hedge fund" perspective, although I'm not interested in making "money" (perhaps better way to put it would be "Bank for International Settlements perspective"). So I claim some expertise there -- Norwegian economy is just a side interest for me :)<br /><br />2. I'm expecting demand for housing to fall significantly during the rest of 2015, and further in 2016-2017, so I think there will be big difficulties with selling all the new apartments that arrive onto the market in 2015-2016. So I wouldn't say it will "dampen the price increase" -- rather "accelerate the price fall".<br /><br />3. I see many parallels to all housing bubbles we have ever seen. They are all different, and all are the same :-) Perhaps some parallels to the US market in 2003-2007 are the enormous credit growth, lenders's willingness to push out loans, and the explicit/implicit assumption of non-falling prices behind nearly all of the buyers' calculations. The "conventional wisdom" is so one-sided and strong, that even today experts in the media say that young people should buy and not wait -- no matter how the economy is slowing down significantly as we speak. The details vary, but this is no doubt a big bubble.Antti Jokinenhttps://www.blogger.com/profile/04778440661520118404noreply@blogger.comtag:blogger.com,1999:blog-515427400466373176.post-45073177421915134952015-02-16T12:12:59.168+01:002015-02-16T12:12:59.168+01:00Hi Antti (usikker på om jeg kan skrive på norsk, s...Hi Antti (usikker på om jeg kan skrive på norsk, så formulerer meg heller på engelsk)<br /><br />I'm a 28 year old economist, living and working in Oslo. I've still not purchased my first home as I'm quite skeptical and baffled regarding the housing market. Prices are just now fair in my opinion. I'm actually outraged by the price level in even the rural areas of the city. We are talking about average prices for apartments (of relative low standards) ranging from 3 - 5 times disposable income. Debt / disposable income ratios I believe are way above recommended levels, and this should be a sign of the economic conditions.<br /><br />In your opinion, do you think (i) the housing market is severely overpriced or a bit overpriced, fueled by the high demand and low supply conditions? (ii) Will building of new apartment complexes in and around the city dampen the price increase and bring it back to a normal level? (iii) Do you see any parallels to the US subprime mortgage cirisi of 07-08?<br /><br />regards,<br />SarmadSarmadnoreply@blogger.com