Why 2023 could be a tough year for Norway's holiday home market

Frazer Norwell
Frazer Norwell - [email protected] • 27 Dec, 2022 Updated Tue 27 Dec 2022 12:22 CEST
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Next year could see a significant downturn in the Norwegian cabin market. Pictured is a cabin in southern Norway. Photo by Håkon Sataøen on Unsplash

House prices in Norway will fall in 2023. However, the decline will likely be greater in the domestic holiday home market, according to several experts .

Real Estate Norway (Eindom Norge) has told public broadcaster NRK that next year could see a significant decline in Norway's cabin market. 

"Our assessment regarding next year is that the holiday home market will be negatively affected by several forces at the same time," Henning Lauridsen, CEO of Real Estate Norway, said. 

However, due to high energy prices, the chairman of the Norwegian Cabin Federation, Trond Hagen, has said that if high energy prices continue, the market may be on the verge of collapse. 

"If it continues, the usual forecasts for holiday homes can simply be thrown away. Then 50 per cent of the cabin owners will stop using the cabin this winter," he said. 

Holiday homes in Norway are not eligible for electricity price support in Norway, meaning owners do not see 90 percent of the bill covered by the government when the price rises above 70 øre per kilowatt . 

High energy prices have dampened demand for cabins and led to owners using them less often than they typically would. 

Hagen warned that a lack of energy support could put the Norwegian cabin market on the brink of collapse.

"The collapse will come if electricity prices continue and no electricity subsidy is introduced for holiday homes," he said. 

 "It is frightening that people do not see what is about to happen. It's going to collapse completely on its own if nothing is done," Hagen added. 

Meanwhile, Laurisden said a combination of higher interest rates, inflation and energy prices would all contribute to uncertainty in the property market. 

The pandemic years, which saw travel restrictions in Norway, saw a huge boom in the holiday home market in Norway. 

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Frazer Norwell 2022/12/27 12:22

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