Change in regulations contribute to rise in Norwegian house prices
House prices in Norway rose three percent in January, according to the latest figures on the property market. Industry experts have pointed to a change in lending regulations contributing to the rise.
Following several months of decline, house prices rose once again in January. Overall, property prices in Norway rose to three percent.
In January, the average house price in Norway was 4,367,609 kroner, according to figures from Real Estate Norway.
House prices in January are typical of the Norwegian market, so house prices remain static when adjusted for seasonal variance.
Experts have previously forecast falling house prices in Norway throughout the first half of 2023, triggered by rising interest rates in 2022.
“House prices rose in January as normal for the month, also known as the January effect,” Henning Lauridsen, CEO of Eindom Norge, said in a press release on the latest figures.
According to Lauridsen, more relaxed lending rules played a factor in the January growth.
“Without the easing of the lending regulations from New Year, the development in the housing market would probably have been weak. Among other things, the reliefs involve a significant improvement in the purchasing power in the housing market for households with normal incomes.”
At the turn of the year, the government introduced a new rule for mortgages. In short, the rule lowered the extent to which mortgage applicants would have their affordability stress-tested against potential interest rate rises.
The previous threshold was an increase of up to five percent. However, this has been lowered to three in light of interest rates increasing rapidly in Norway throughout 2021 and 2022.
Lauridsen said that the rise in prices was unlikely to last in the coming months and that property prices would continue to fall in the short term
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Following several months of decline, house prices rose once again in January. Overall, property prices in Norway rose to three percent.
In January, the average house price in Norway was 4,367,609 kroner, according to figures from Real Estate Norway.
House prices in January are typical of the Norwegian market, so house prices remain static when adjusted for seasonal variance.
Experts have previously forecast falling house prices in Norway throughout the first half of 2023, triggered by rising interest rates in 2022.
“House prices rose in January as normal for the month, also known as the January effect,” Henning Lauridsen, CEO of Eindom Norge, said in a press release on the latest figures.
According to Lauridsen, more relaxed lending rules played a factor in the January growth.
“Without the easing of the lending regulations from New Year, the development in the housing market would probably have been weak. Among other things, the reliefs involve a significant improvement in the purchasing power in the housing market for households with normal incomes.”
At the turn of the year, the government introduced a new rule for mortgages. In short, the rule lowered the extent to which mortgage applicants would have their affordability stress-tested against potential interest rate rises.
The previous threshold was an increase of up to five percent. However, this has been lowered to three in light of interest rates increasing rapidly in Norway throughout 2021 and 2022.
Lauridsen said that the rise in prices was unlikely to last in the coming months and that property prices would continue to fall in the short term
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