PROPERTY: Have Norwegian house prices bottomed out?

Frazer Norwell
Frazer Norwell - [email protected]
PROPERTY: Have Norwegian house prices bottomed out?
Property prices in Norway rose during February 2023. Pictured is a block of flats in Norway. Photo by Marius Niveri on Unsplash

Housing prices in Norway rose throughout February, the latest figures show, with experts describing the growth as surprisingly strong. So have house prices in Norway bottomed out after a decline last autumn?


House prices in Norway rose by 1.5 percent in February 2023, figures released on Friday by Real Estate Norway (Eindom Norway) show.

When adjusted for seasonal variation, the growth was around 0.3 percent. However, when excluding the years throughout the pandemic, where house prices experienced robust growth, the figures for February are the highest since February 2011. Since the turn of the year, house prices in Norway have risen by 4.5 percent. 

"House prices rose further in February after a January that was far stronger than many expected," Henning Lauridsen, managing director of Real Estate Norway, said in a press release. 


The strong price development follows from a dip in the market throughout the back end of 2022, with many analysts also previously expecting house prices to fall during the opening months of this year. 

Experts predicted that house prices would fall due to rising interest rates making mortgage and loan repayments more expensive for consumers, dampening demand. 

"There is surprisingly good housing price development given the sharp rise in interest rates," Kjersti Haugaland, the chief economist at DNB Markets, told the Norwegian newspaper Dagens Næringsliv

Meanwhile, Sara Midtgarrd, a senior economist at Handelsbanken, told the paper that the rising prices indicated that the Norwegian market might not be as interest rate sensitive as initially predicted. 

One factor which may have offset the interest rate increases and contributed to stronger-than-expected house prices is the introduction of new mortgage rules, which made it easier to obtain lending from a bank. 

"Without the easing in the lending regulations from New Year, the development in the housing market would probably look different," Lauridsen said. 

Essentially regulations were changed that meant that mortgage applicants' finances would be stress tested against lower potential interest rates than previously. Still, Laurdisen said that more unpredictable market conditions could lay ahead. 

"So far this year, housing price developments have been stronger than we predicted in our forecast from December. We expect that the policy rate will be raised further in both March and June, which will weaken demand in the housing market and that the development over the year will therefore continue to be weak," he predicted. 


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