1. 1 1 Estimating stock and investment of foreign dwellings by Norwegian households by Wenche Irén Sterkeby Agenda item 8

2. 2 Introduction Households’ acquisition of foreign property is increasing Explanatory factors: »growth in households’ income »more leisure »higher accessibility of foreign property markets Difficulty of obtaining data Methodology to estimate foreign property investment »Number and location »Average prices »Transactions of household investment in foreign property

3. 3 Number of second homes abroad Year 2002 used as a benchmark »An interview survey conducted in 2002 »2 percent of Norwegian households have holiday homes abroad Yearly data is projected by extrapolating the 2002 estimate with a volume index »Index deduced from the Tax Return Statistics (Statistics Norway) »The Statistics register the number of persons reporting ownership abroad Estimated number of Norwegian households that own a second home abroad:

4. 4 Location and prices of second homes abroad Location »Founded on balance of payments data - Former international transaction reporting system »Links households to - transactions in foreign estate - their countries of origin

5. 5 Average prices »The property market is split into 5 sub-markets »Official average dwelling prices used as a proxy »Conversion of actual currencies to NOK »The estimated number of households is divided according to the frequency distribution »Stock = (price) X (number of second homes) Total value of foreign dwellings owned by Norwegian households

6. 6 Transactions in foreign property Difference between current and previous stock level »E = X + Y, where »Y = revaluation effects »X = foreign property transactions »Y = E – X Foreign property transactions »X country A = (N t, country A - N t-1, country A ) x P t, country A Total foreign property transactions »X = X Spain + X Sweden + X France + X Denmark + X other countries

7. 7 Summary The measurement in 2002 used as a benchmark Volume index based on yearly collected data Identified 5 property markets Derived a frequency distribution Official average dwelling price for each market Stock value = (estimated number of homes)X(average price) Transaction is change in number of dwellings between two subsequent periods multiplied by current average price