Property latest: What's the outlook for Norway's housing market this Autumn?
As is the case in most of Europe, Norway's housing market is currently characterized by a lot of uncertainty. However, housing prices in the country are expected to fall this Autumn due to – among other things - cyclical patterns and the effect of rising interest rates.
After a year of rising housing prices in Norway, the market is starting to cool off a little. According to the latest Real Estate Norway data, house prices fell by 2.2 percent in September. Adjusted for seasonal variations, prices fell by 0.6 percent.
However, it is important not to overstate the decrease, as home prices in Norway are cyclical – they're traditionally lower in the Autumn and Winter.
While the COVID-19 pandemic has left a mark on the real estate market, most experts still agree that falling prices should be the norm in October, November, and December.
This Autumn, price developments will also be characterized by a considerable level of uncertainty as the energy, security, and inflation crises continue to grip Norway, Scandinavia, and the Old Continent.
Housing market snapshot
Wondering how many homes are sold or how many homes are put for sale on the market each month? Curious about the average price and sale time for a home in Norway at the moment?
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In September, 9,798 homes were sold in Norway, a 5.6 percent decrease compared to the corresponding month in 2021. At the same time, 11,716 homes were listed for sale, which is 17.3 percent more than in September 2021.
Furthermore, it took an average of 29 days to sell a home last month, according to Real Estate Norway.
The September statistics show that the number of properties on the market has registered a robust increase, while home sales have leveled off.
This points to a potentially lower home price trend in the months ahead.
Interest rate hikes
The fact that price developments in September were relatively weak in virtually all parts of the country – with the exception of Ålesund and the surrounding area – could indicate that the Central Bank's (Norges Bank) interest rate hikes are beginning to work.
There are also other signals that Norway's economy has started taking note of the monetary tools at Norges Bank's disposal and broader crisis-related factors.
In its Tuesday forecast, the Confederation of Norwegian Enterprise (NHO) announced that unemployment in Norway is set to increase in the months ahead as the economy continues to be affected by a shortage of goods, raw materials, and energy.
As activity levels in the Norwegian economy decline, growth in the workforce will likely level off.
The Norwegian economy is booming at the moment, but should this development reverse, it would also likely negatively affect housing prices in the short term.
Change expected in January
If prices continue to follow seasonal trends, expect to see them rise again from January due to the lack of properties on the market and as buyer interest starts growing.