Have we seen the last interest rate hike for now?

These are challenging times for many families, with high interest rates, inflation, and overall uncertainty. In an effort to curb inflation, Norges Bank recently raised the policy rate by another 0.25 percentage points to 4.25%, the highest level in over a decade. Even as central bank director Ida Wolden Bache suggests, 'Whether further rate hikes will be necessary will depend on the economic development,' she adds a dose of caution to hopeful Norwegians by suggesting that Norges Bank may raise the policy rate once more, most likely in December.

Higher rates for longer?

According to E24, wage levels have not kept pace with rising prices, and the typical family budget is burdened by higher interest costs and increased food prices. In 2024, purchasing power is expected to increase again as wage levels are projected to rise by 5.1%, while price growth slows to 4%. At the same time, the interest burden remains at a high level.

However, both Statistics Norway (SSB) and Sparebank1 SR-Bank believe that the peak interest rate has been reached with the latest hike in September. SSB's forecasts indicate that interest rates will not rise further, price growth is on the decline, and purchasing power will grow as wage growth outpaces price growth after two years of decline.

We can expect that today's interest rate levels will persist for some time, at least until the end of 2024. This entails significant costs for servicing a loan and maintaining a property when owning a cabin all by yourself. Through companies like &Hamlet, significant savings can be achieved by owning a fractional share of a beautiful cabin, an ownership model more in line with how often one actually uses the cabin throughout the year. There has never been a better time when it has been more rational to share both ownership and costs for a holiday home.

How can we continue to be a cabin-loving nation in the future without harming nature?

NRK reports increased resistance among cabin municipalities to the current way of building and using cabins. In a radio program on NRK P2 Ekko about the future of cabin use in Norway, possibilities for more sustainable cabin construction were discussed, including suggestions to build smaller cabins or rent them out more. The local population and environmentalists are now protesting after massive development in recent years, with heavy seasonal traffic combined with empty cabins for the rest of the year posing significant challenges locally. Norwegians are a cabin-loving people, and the belief in more sharing was highlighted as the most sustainable way to own a cabin. However, it is crucial to involve a professional actor who can ensure seamless interaction between owners.

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We will continue to share updates on a regular basis. Please feel free to contact us if you have any questions or would like to take a closer look at a specific holiday home.