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House prices in Norway continue stronger than expected growth

Frazer Norwell
Frazer Norwell - [email protected]
House prices in Norway continue stronger than expected growth
House prices in Norway have continued to rise. Pictured are apartments in Oslo. Photo by Eirik Skarstein on Unsplash

Property prices in Norway have risen 6.8 percent this year with a strong economy and relaxed regulations contributing to the rise, the latest figures show.

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The average cost of a house in Norway is now 4,595,966 kroner, figures released by Real Estate Norway on Thursday show.

During April, house prices rose by one percent and are up 6.8 percent compared to the beginning of the year. Henning Lauridsen, CEO of Real Estate Norway, has called the rise “sensational”.

“House prices rose sharply in April after a strong development in March as well. In light of the fact that the key interest rate has now reached its highest level since 2008, the development is sensational. The housing market is less sensitive to interest rates than many thought, including us,” he said.

“We link the development to the fact that there is a strong development in the Norwegian economy and a strong labour market in combination with the relaxations in the lending regulations. The latter has meant that ordinary home buyers have regained the purchasing power they lost in the autumn, he says.

The low supply of new homes means that more people have to choose used home,” he added.

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Kristiansand and the Stavanger area have seen the biggest house price increases this year, with rises of 10.8 percent and 10.4 percent. Tromsø, northern Norway, has seen the weakest price growth, with homes costing 4.4 percent more than at the beginning of the year.

The Norwegian Association of Real Estate Agents has said that a shortage of new homes is driving up the price of second-hand homes. This, in turn, would lead to a tighter rental market.

“With higher financing and housing costs, we fear that relatively many will be forced to rent housing at a relatively high price in a pressured rental market,” Carl O. Geving, director of the Norwegian Association of Real Estate Agents, said of the figures.

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