For the time being, the highly cyclical housing market appears to be past the largest fluctuations.
“Most major metropolitan areas are experiencing moderate price growth and a high number of transactions in the secondhand housing market. However, the number of new home sales is also rising steadily, and national statistics bureaus are reporting a tapering off of construction costs,” says Veidekke Director of Analysis Kristoffer Eide Hoen.
A couple of years ago, the number of construction starts for residential projects launched in and around Stockholm and Oslo was very high. The number is now far smaller, helping to stabilise – and in some areas reducing – the supply of unsold new-build apartments.
“Against this backdrop, 2020 should bring moderate growth in the number of residential new-builds in Oslo and Stockholm, and generally stable residential construction activity elsewhere in Scandinavia,” says Hoen.
As regards the building construction market otherwise, Hoen points out two particular segments worth monitoring as 2020 approaches:
“Growth in both the railways market and the market for health care-related buildings is being fuelled by clear ambitions and public financing, and activity levels are set to rise substantially in these segments. Although demand for industrial and logistics buildings is also boosting construction activity, we expect that generally weaker economic conditions may dampen further growth in this segment after 2020.”
“The underlying market drivers are generally strong and are further supported by the interest rate outlook,” says Kristoffer Eide Hoen. “In our view, weak international economic conditions represent the greatest risk. We have previously seen that these may impact investment appetite among businesses and purchaser confidence in the housing market. However, based on our current insights, we take a positive view of the building construction market outlook for the next few years.”
Veidekke’s complete analysis of the Scandinavian construction and civil engineering market is available on veidekke.com.
For more information, please contact:
Kristoffer Eide Hoen, Director of Analysis, Veidekke ASA, +47 976 75 434, Kristoffer.Eide.Hoen@veidekke.no
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Veidekke is one of Scandinavia's largest construction and property development companies. The company undertakes all types of building construction and civil engineering contracts, develops residential projects, maintains roads, and produces asphalt and aggregates. The company is known for its involvement and local knowledge. Its annual turnover is approximately NOK 36 billion, and half of its 8,600 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange and has always posted a profit since it was founded in 1936.
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| Presentation Economic Activity Report October 2019 |