This 74 pages booklet presented the property I bought in 2018. The pink cirkle is added by me. Sold at 5 140 000 NOK.
A peace of copypaper, front and back, was how my first property was presented in 1987. Sold at 540 000 NOK.
With these two examples I will point your attention how a home owner life has changed over the past 35 years. To start with, I paid more just to keep my morgage (interest rate) in 1987 than I would have had to do today. Back then, the interest rate was 17 % in the grey market. I had 2 jobs, worked around the clock, and even today the amount of money paid in morgage would be a big chunk in my private economy. Bottom line, I learned the golden rule of capitalism; eat or be eaten. Given the same loan grade as I had back then (80 %) I would pay 1000 NOK less each month in 2021. For an appartment twice the size.
These above pictures show 4 different real estate agents are at Torshov, a former working class neighborhood. At one crossroad you can stay at the same spot, turn your face north, south, west an east, and there they are. 4 competitors ready to sell your apparment. Before, this corner used to be lively with shops where people bought groceries and supplies. Today, it´s a stark reminder of the new era no person can close their eyes to. There are a couple of coffee shops near by though, if you need to rest your mind.
To sell an appartment in 2021 will cost you between 100-200 000 NOK. Just to cover the broker fee, photographer, assessment guy, print, interior designer, advertising and for broker to have him or her show up - right, at shows. Extra.
The cost per m2 was in 1987 was 12 000. The 2018 purchase was 5 times up, 61 000 per m2.
You don´t need to be Einstein to understand that this is like living on a volcano. The whole world economy is dependent on a low interest rate. That´s the gravest part of todays bubble, there is no more cuts to be made. Central banks all over the world is at 0 or below 0. Given that this paradigm wiht low rates would change one day, let´s say back to the grey market economy in 1987 when I was 30. An interst rate at 17 % would cost NOK 700 000 per year for my 2018 purchase. That is 100 000 NOK more than average income in this country.
Am I a doomsday prophet? No. I am just a person who has lived through those 35 years as a capitalist. A happy homeowner capitalist that is.
In the end it´s about trust. Who you believe in. The global economy? Your local government? Capitalism? Last year, through the pandemic months, the real estate market escalated again, the stock market as well. Here in Oslo an appartment went up 15 %. It´s so wild, so scary so unpredictable that the only way we can stop this is i we - the capitalists - unite!
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