The lowest point of the Nordic property market is starting to appear, according to Northern European property advisor Newsec.
The lowest point of the Nordic property market is starting to appear, according to Northern European property advisor Newsec.
The Autumn 2009 Newsec Property Report claims that prices in Norway and Denmark have begun to stabilise, Sweden, Finland and the Baltic countries have not yet bottomed out. The rental market throughout the region has weakened significantly in the past year, but the trend varies to some extent between the countries, with Helsinki and Copenhagen generally showing smaller rent reductions than the other capital cities.
Newsec says the downward trend has halted, with prices in Oslo and Copenhagen beginning to stabilise. One reason for the stabilisation in Norway is the country's faster economic recovery due to its raw-material-based economy with substantial oil and gas exports.
In addition, the country experienced the credit crunch earlier than the rest of the region, which led to a faster decline in property prices. Low interest rates in combination with a slightly better functioning credit market is now counterbalancing rising vacancies and expectation of lower rent revenues when lease contracts are renegotiated. In Copenhagen the stable trend in rents for good-quality properties in good locations means that prices are not expected to sink much further.
‘We are now seeing signs that the bottom of the market is approaching, since a number of players are starting to come in and buy. Indications from the property markets in London and Paris reinforce this, since foreign investors have returned, transaction volumes have started to increase and prices are beginning to show signs of stabilising,’ says Marie Bucht, Head of Advice at Newsec.
