Where in Norway are house prices rising the fastest?
The growth of property prices in Norway this year has surpassed what many industry experts expected, but where in the country are they rising the fastest?
Towards the end of 2022, most Norwegian commentators and analysts following the real estate industry agreed that 2023 would be characterised by a cooling housing market, with lower prices.
However, actual market developments have proved these forecasts wrong already and Norwegian households have shown that they are better equipped to handle higher interest rates than what even the central bank (Norges Bank) predicted.
READ MORE: The biggest issues facing first-time home buyers in Norway in 2023
Several factors are currently keeping housing prices high, including high wage growth, a high degree of job security, increased population growth, and, especially thee low number of new houses being built.
The latest housing price figures
House prices in Norway increased by 0.8 percent from April to May of 2023, according to the latest figures from Real Estate Norway (Eiendom Norge), but certain parts of the country are seeing prices rising faster than others.
Notable price hike in the capital
In Oslo, house prices have notably risen over the past six months. So far this year, prices in the capital have risen by 7.3 percent.
Due to price dips late in 2022, housing prices in Oslo are now 0.5 percent higher than they were 12 months ago. Still, that is 0.2 percent higher than the previous all-time high registered in August last year, according to the newspaper Dagens Næringsliv (DN).
Managing Director Carl O. Geving of the Norwegian Association of Real Estate Agents (NEF) pointed out that Oslo prices are so high that many people will likely struggle to take out loans.
"A lot of people will struggle to secure financing when the prices per square metre are over 92,000 kroner on average and the mortgage interest rate is approaching five percent. This will probably limit price growth in Oslo in the near future," Geving said.
Strongest price growth in Kristiansand and Stavanger
The historic region of Romerike, in south eastern Norway, registered the most vigorous seasonally adjusted price development (meaning that prices were modified to take into account seasonal fluctuations such as higher prices in the Spring/Summer and lower prices in Autumn/Winter). In May, prices in Romerike rose by 1.1 percent, according to Real Estate Norway.
Bodø and Fauske had the weakest seasonally adjusted price development, with a seasonally adjusted price decrease of one percent.
So far in 2023, the biggest price rises were seen in the southern Norwegian cities of Kristiansand and Stavanger (with their surroundings), with an increase of 12.5 and 11.8 percent, respectively.
The weakest development so far this year was seen in the northern city of Tromsø, with an increase of 4.4 percent.
"So far this year, Kristiansand and Stavanger and their surroundings stand out with great growth in house prices. Kristiansand has long had a price level well below the other medium-sized cities in Norway. Now, however, the price level in Kristiansand is about to rise to the same level as the other cities in Norway," Lauridsen said.
"Unfortunately, new home sales are still very weak. Hopefully, the robust developments in the second-hand housing market will, at some point, also spill over into the market for new housing, provided that the builders manage to get control over the costs.
"There is a need for new homes, and they are not currently being built. It is absolutely necessary to build enough homes in Norway so that we avoid imbalances in the housing market further along the road," the head of Real Estate Norway said.
It took an average of 35 days to sell a home in Norway in May, down from 40 days in April.
Moderate price changes expected in coming months
Real Estate Norway expects price growth to slow down in the months ahead.
"Many homes were sold in May, and so far this year, more second-hand homes have been sold in Norway than at the same time in 2022.
"There has also been great growth in the number of new second-hand homes on the market throughout the month. This indicates a more moderate development in house prices in the coming months," Lauridsen said.
"So far this year, house prices have risen far more than everyone expected at the start of the year. If things follow typical patterns and fall through the autumn, we will probably end up with an increase of 3-4 percent in 2023," he said.
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Towards the end of 2022, most Norwegian commentators and analysts following the real estate industry agreed that 2023 would be characterised by a cooling housing market, with lower prices.
However, actual market developments have proved these forecasts wrong already and Norwegian households have shown that they are better equipped to handle higher interest rates than what even the central bank (Norges Bank) predicted.
READ MORE: The biggest issues facing first-time home buyers in Norway in 2023
Several factors are currently keeping housing prices high, including high wage growth, a high degree of job security, increased population growth, and, especially thee low number of new houses being built.
The latest housing price figures
House prices in Norway increased by 0.8 percent from April to May of 2023, according to the latest figures from Real Estate Norway (Eiendom Norge), but certain parts of the country are seeing prices rising faster than others.
Notable price hike in the capital
In Oslo, house prices have notably risen over the past six months. So far this year, prices in the capital have risen by 7.3 percent.
Due to price dips late in 2022, housing prices in Oslo are now 0.5 percent higher than they were 12 months ago. Still, that is 0.2 percent higher than the previous all-time high registered in August last year, according to the newspaper Dagens Næringsliv (DN).
Managing Director Carl O. Geving of the Norwegian Association of Real Estate Agents (NEF) pointed out that Oslo prices are so high that many people will likely struggle to take out loans.
"A lot of people will struggle to secure financing when the prices per square metre are over 92,000 kroner on average and the mortgage interest rate is approaching five percent. This will probably limit price growth in Oslo in the near future," Geving said.
Strongest price growth in Kristiansand and Stavanger
The historic region of Romerike, in south eastern Norway, registered the most vigorous seasonally adjusted price development (meaning that prices were modified to take into account seasonal fluctuations such as higher prices in the Spring/Summer and lower prices in Autumn/Winter). In May, prices in Romerike rose by 1.1 percent, according to Real Estate Norway.
Bodø and Fauske had the weakest seasonally adjusted price development, with a seasonally adjusted price decrease of one percent.
So far in 2023, the biggest price rises were seen in the southern Norwegian cities of Kristiansand and Stavanger (with their surroundings), with an increase of 12.5 and 11.8 percent, respectively.
The weakest development so far this year was seen in the northern city of Tromsø, with an increase of 4.4 percent.
"So far this year, Kristiansand and Stavanger and their surroundings stand out with great growth in house prices. Kristiansand has long had a price level well below the other medium-sized cities in Norway. Now, however, the price level in Kristiansand is about to rise to the same level as the other cities in Norway," Lauridsen said.
"Unfortunately, new home sales are still very weak. Hopefully, the robust developments in the second-hand housing market will, at some point, also spill over into the market for new housing, provided that the builders manage to get control over the costs.
"There is a need for new homes, and they are not currently being built. It is absolutely necessary to build enough homes in Norway so that we avoid imbalances in the housing market further along the road," the head of Real Estate Norway said.
It took an average of 35 days to sell a home in Norway in May, down from 40 days in April.
Moderate price changes expected in coming months
Real Estate Norway expects price growth to slow down in the months ahead.
"Many homes were sold in May, and so far this year, more second-hand homes have been sold in Norway than at the same time in 2022.
"There has also been great growth in the number of new second-hand homes on the market throughout the month. This indicates a more moderate development in house prices in the coming months," Lauridsen said.
"So far this year, house prices have risen far more than everyone expected at the start of the year. If things follow typical patterns and fall through the autumn, we will probably end up with an increase of 3-4 percent in 2023," he said.
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