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HOUSING

Property in Norway: Prices rise nationwide but fall in Oslo

The price of a property rose 1.2 percent across Norway in March but fell by same the amount in the capital Oslo. Overall house prices are now 12 percent higher than they were a year ago.

Property in Norway: Prices rise nationwide but fall in Oslo
Photo by Jacek Dylag on Unsplash

The growth is just over one percent higher than what is considered average growth according to new figures from real estate organisation Eiendom Norge.

A house sold on the market in March took 43 days to sell, over a week shorter than the month before when it took an average of 51 days

Figures show that less people currently own a home due to rising house prices. According to Statistics Norway the proportion of tenants has increased by around one percent.

This growth in house prices is not expected to last much longer, however.

“With the increased supply we have seen in March, inflation will probably slow down somewhat towards the summer,” CEO of Eiendom Norge, Hennig Lauridsen said at a press conference.

Nejra Macic chief economist at the Forecast Centre, an independent market analysis company, told state broadcaster NRK that she believes March may be the last month where house prices rise in Norway.

“If it is not March (the last month with growth), we do not think it will be long. We have covered most of the growth this year,” she said

Kari Due Andersen, chief economist at Handelsbanken, agrees with this and believes that due to floating mortgage rates house price growth will soon slow down.  

“It is a rule of thumb that says that the mortgage rate that people have in the bank is on average 2 percentage points higher than interest rates. That is because the banks adjust the key policy rate to costs. When the key policy rate rises, so does the mortgage rate. Then a mortgage becomes more expensive, and many have floating interest rates. It is a factor that will contribute to house price growth slowing down, and that households will wait,” she told NRK.

Despite the fall in March, house prices in Oslo are still up 15.6 percent compared to last year. Grethe W. Meier, CEO, of Privatmegleren, told online news site Nettavisen that the drop was not concerning.

“I think it is important to see February and March together. In addition, in March, the proportion of small apartments fell. It is probably these apartments that have been driving the price up, and they are more volatile. When that share has fallen it helps to lower prices,” she said.

READ MORE: Property in Norway: What to expect if you’re buying a home in Oslo

Those looking to buy a home received warning from Norway’s central bank, Norges Bank, that interest rates could rise this autumn rather than next spring.

“It has helped that people have understood that the bottom has been reached for mortgage rates, and that there is only one way interest rates will go in the future. When it downs on people that interest rates will rise then house price expectations will also weaken. Then there will be an increasing number of people who will sell before they want to buy. Then the pressure and bidding wars will disappear. But it will take time and will not change overnight,” said Macic.

House prices March also rose in Norways other biggest cities 

  • In Stavanger, the increase was 0.7 percent. Prices are up 7.9 percent in the past twelve months
  • In Bergen, prices rose by 3.0 percent, and have increased 12.7 percent in the last 12 months
  • In Trondheim, prices were up 2.2 percent and have risen 10.6 percent in the past 12 months. 

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TRAVEL

Could Oslo-Copenhagen overnight train be set for return?

A direct overnight rail service between the Norwegian and Danish capitals has not operated since 2001, but authorities in Oslo are considering its return.

Norway’s transport minister Knut Arild Hareide has asked the country’s railway authority Jernbanedirektoratet to investigate the options for opening a night rail connection between Oslo and Copenhagen.

An answer is expected by November 1st, after which the Norwegian government will decide whether to go forward with the proposal to directly link the two Nordic capitals by rail.

Jernbanedirektoratet is expected to assess a timeline for introducing the service along with costs, market and potential conflicts with other commercial services covering the route.

“I hope we’ll secure a deal. Cross-border trains are exciting, including taking a train to Malmö, Copenhagen and onwards to Europe,” Hareide told Norwegian broadcaster NRK.

The minister said he envisaged either a state-funded project or a competition awarding a contract for the route’s operation to the best bidder.

A future Oslo-Copenhagen night train rests on the forthcoming Jernbanedirektoratet report and its chances of becoming a reality are therefore unclear. But the Norwegian rail authority earlier this year published a separate report on ways in which passenger train service options from Norway to Denmark via Sweden can be improved.

“We see an increasing interest in travelling out of Norway by train,” Jernbanedirektoratet project manager  Hanne Juul said in a statement when the report was published in January.

“A customer study confirmed this impression and we therefore wish to make it simpler to take the train to destinations abroad,” Juul added.

Participants in the study said that lower prices, fewer connections and better information were among the factors that would encourage them to choose the train for a journey abroad.

Norway’s rail authority also concluded that better international cooperation would optimise cross-border rail journeys, for example by making journey and departure times fit together more efficiently.

The Femahrn connection between Denmark and Germany, currently under construction, was cited as a factor which could also boost the potential for an overland rail connection from Norway to mainland Europe.

Night trains connected Oslo to Europe via Copenhagen with several departures daily as recently as the late 1990s, but the last such night train between the two cities ran in 2001 amid dwindling demand.

That trend has begun to reverse in recent years due in part to an increasing desire among travellers to select a greener option for their journey than flying.

Earlier this summer, a new overnight train from Stockholm to Berlin began operating. That service can be boarded by Danish passengers at Høje Taastrup near Copenhagen.

READ ALSO: What you need to know about the new night train from Copenhagen to Germany

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