Improving the Housing Market in Norway

Abbie Ackerly
March 01, 2021
Housing-in-Norway

National house prices in Norway rose 2.89 percent during the year to Q3 2020. After a lackluster performance in the last three years, the growth in the housing market in Norway is now on the rise. The inflation-adjusted national house price index rose by 2.89 percent in Q3 2020 from the previous year, an improvement from Y-o-Y growth of 0.69 percent in Q3 2019 and its best performance since Q2 2017. Quarter-on-quarter house prices increased slightly by 0.62 percent in Q3 2020.

The slower growth of the housing market in recent years can be partly attributed to the implementation of stricter mortgage rules on 1 January 2017, which focused on limiting house prices in Oslo.

Demand is rising again, construction activity remains weak.

Demand is rising again, following a temporary slowdown in Q1 2020 due to pandemic restrictions. In Q3 2020, sales of residential properties in Norway increased by 6.1 percent to 27,039 units from the previous year, according to Statistics Norway. Despite this, housing start-ups fell by 13.9 percent to 21,396 units in the first nine months of 2020 while completion fell by 8 percent to 20,684 units.

Rents, rental income: rental income is low at 3.13 percent.

The cost of the Oslo apartment is around €8,162 per square. m.

Recent News: In November 2020, Norges Bank kept its key rate unchanged at a record low of 0 percent, following four consecutive rate cuts since March, when economic activity abruptly declined as a result of the COVID-19 pandemic, aggravated by a sharp decline in oil prices.

Norway’s economy rebounded in Q3 2020, with GDP growing by 4.6 percent from the previous quarter, compared to a 4.7 percent contraction in Q2 and the largest quarterly growth since at least 1990. This was mainly driven by an increase in domestic demand following the gradual easing of pandemic-induced restrictions. Mainland GDP, excluding volatile oil and shipping sectors, increased by 5.2 percent in Q2 2020 from the previous quarter, a sharp turnaround from the previous quarter’s 6 percent decline. On an annual basis, the overall economy decreased slightly by 0.2 percent in Q3, an improvement from the 4 percent contraction recorded in Q2.

The overall economy is projected to fall by 1.9 percent this year, while the mainland GDP is projected to fall by 3.2 percent, according to Statistics of the Housing Market in Norway.


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