Norway became the country with the biggest bubble in the real estate market

The biggest bubble in the world in the real estate market has been formed in Norway today. This conclusion was reached by analysts of the international rating agency Moody's Investors Service, RBC reports citing a reference to the international news agency Bloomberg. The criterion by which Moody's determined the presence and size of the bubble was the gap between prices and rental rates for housing and the equilibrium market price.

Today, the cost of residential real estate in Norway exceeds the market equilibrium by 8%. Since 2010, there has been an almost uninterrupted rise in housing prices (including with government support) at a record low interest rates.

Over the past year, the rate of price growth has slowed significantly, and in November 2017, housing in Norway for the first time in almost four years, became cheaper. At the same time, the volume of supply increased, as property owners began to actively sell it. These trends indicate that the real estate market in Norway has declined sharply, which could cause the bubble to burst, say experts from Moody's. The crisis of the real estate market will affect almost the whole country, since in Norway, 85% of the population owns housing, the publication says.

Pre-crisis situation analysts Moody's also recorded in the property market in Belgium, Germany and France. According to the agency's research, the cost of housing in these countries is above the "equilibrium" price of 7%, 6% and 5%, respectively.

HomesOverseas.ru