Transaction volumes in the Nordic property market will reach almost €40bn in 2015, according to new figures from Pangea Property Partners. This is the highest volume ever recorded.
“The Nordic property market is red-hot at the moment. There are buyers in all segments, and in many deals we see record prices,” said Mikael Söderlundh, head of research and partner at Pangea Property Partners.
The Nordic property transactions were up 36% from 2014 to 2015. Growth was particularly strong in Norway and Denmark, where transaction volumes have doubled from last year. Finland also recorded a volume increase of 30% where Sweden, the regions biggest transaction market recorded a slight decline in 2015.
The volumes in the Nordic region as a whole in 2015 are even higher than the previous record years of 2006 and 2007. In terms of national markets, the transaction volumes for Norway and Finland are at all-time highs.
International investors are the driver behind the growth in transaction volumes. Cross-border transactions accounted for just over 35% of the Nordic volume in 2015, which is the highest figure since the financial crises. Six out of ten of the ten largest deals had an international buyer.
Record low interest rates and strong investor demand has put further downward pressure on yield levels. Prime objects have been sold below 4% in the office, retail and hotel segments.
“The current macroeconomic environment favours property investments, as demonstrated by these record figures. We expect the high transaction activity to continue in 2016, with significant cross-border capital flows,” said Bård Bjølgerud, CEO and Partner at Pangea Property Partners.
Investment in European markets rose by 20% in Q3 2015 compared to the same period in 2014. Savills reported that Norway was amongst the markets that saw the biggest increase in investment volumes in Q3 2015, with an increase of 190% (Portugal +804% and Italy +107%).
