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Norway likely to see housing price dip to continue into the autumn

Frazer Norwell
Frazer Norwell - [email protected]
Norway likely to see housing price dip to continue into the autumn
Housing prices fell for the first time this year in June. Falls may continue into the autumn. Pictured are the backstreets of Trondheim.

House prices in Norway have fallen for the first time this year, figures released Wednesday show. Industry experts expect the trend to continue into the autumn.

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Property prices fell by 1.2 percent in June, the latest figures from Real Estate Norway (Eindom Norge) show. When adjusted for seasonal variation, house prices fell by 0.5 percent. Property prices in Norway typically rise and fall with the seasons.

Prior to the figures being released, several brokerages expected that house prices would fall in June as they had noticed an uptick in the number of unsold homes.

“Throughout June, we have seen a clear tendency for the number of unsold homes to increase, and fewer are being sold than are advertised. This situation leads to tougher competition for buyers. Normally August is a good sales month, but I think the autumn could be tougher, with more unsold homes and a drop in house prices,” Espen Skotvold, regional manager for brokerage firm DNB Eindom, told Norwegian newspaper Dagens Næringsliv.

The last time house prices in Norway fell was in December last year. In 2023, house prices have risen by 6.3 percent nationally, according to Eidnom Norge.

Henning Lauridsen, managing director of Eindom Norge, said that he expects a rise in interest rates to affect prices throughout the rest of the year.

“We expect that the strong rise in interest rates will have an effect on house prices going forward. Much of the strong rise in housing prices in the first half of the year will probably be corrected in the second half of the year,” he said.

Norway’s central bank, Norges Bank, has been raising the key interest rate to curb inflation. The key policy rate is currently 3.75 percent and has been raised by 2.5 percentage points over the last year.

Consumer loan and mortgage interest rates could peak between five and six percent, making repayments more expensive.

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Randi Marjamaa, head of the private market at financial institution Nordea, told the Norwegian newspaper E24 that the market would begin to flatten out.

“There is less pressure on prices, and we notice that some homes have to be relisted after not being sold. We see that the market is flattening out a bit,” she said.

Lauridsen said that the second-hand housing supply in Norway was more balanced.

“The supply of housing has increased through June, and there is now a better balance in the second-hand housing market than we have had previously in 2023. The number of unsold properties per day has grown through June as normal but was, for example, higher at the same time in 2019,” he said.

A large number of homes were also being sold across the country, a sign that the market was still healthy despite a fall in prices being on the cards in the coming months.

“It testifies to a healthy and well-functioning housing market,” Lauridsen said.

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