What's on the cards for Norway's property market this autumn?
The real estate market in Norway has been quite hectic during the spring and summer of 2023. An expert has told The Local that a slowdown is expected in the coming months.
Despite the downturn in Norway’s property market that most industry experts feared in late 2022 and earlier this year, the ominous forecasts haven’t materialised.
So far this year, house prices have increased by 5.2 percent. That figure includes a small drop in prices over the past two months.
READ MORE: A beginner's guide to buying a home in Norway
New trends emerging
The CEO of the real estate agency Nordvik, Martin Kiligitto, told The Local that the company had seen strong results in the second quarter of 2023. The company has seen an increase in the number of homes sold in the second quarter.
According to Kiligitto, there are some new market trends and changes compared to previous years.
“We have seen a change in the market, including the western part of Norway, that started in September last year.
“The time from when a home was put on the market until it was sold has increased from 17.6 days in the second quarter of 2022 to 27.1 for the same period in 2023.
“However, the number of days used to sell a home has improved - by that, we mean it has decreased - from January.
“At the same time, we moved from a very hot market in the first half of 2022 that cooled off in the second half of the year. This was due to the increase in interest rates, electricity prices, and other commodities individuals buy,” Nordvik’s CEO explained.
House prices to slow down and homes to remain on the market for longer
The industry expert expects price developments in Norway’s real estate market to slow down in the second half of the year, mostly due to the effect of high interest rates.
“It is our assessment that the time from when a home is put on the market until it is sold will increase this autumn.
“We also believe that the price development will gradually slow down in the second half of 2023 because of increased interest rates, higher living costs, and slightly higher unemployment rates.
“On the other hand, a good labour market, high wage growth, low housing construction, migration to the cities and a tight market for rental housing will be able to reduce the fall in prices,” he said.
READ MORE: Young people to struggle in the Norwegian housing market despite price dip
Big demand for small homes
According to Nordvik, smaller apartments in city centres will be the most popular type of property in late summer and autumn this year.
“There has been a high demand for these apartments for quite some time, especially in 2023. The reason for this is twofold.
“First, a limited number of these small apartments are available in the market. Second, many individuals or couples can afford to buy them, even with rising interest rates.
“Young individuals want to live as close to universities, restaurants, work, and other attractions as possible. Being able to walk, cycle, or be in close proximity to public transport is of importance to this segment of the population,” Kiligitto told The Local.
And what about 2024?
Looking ahead, Nordvik’s CEO believes several factors on the horizon might have an impact on the market dynamics.
“We expect house prices to improve in 2024 as a result of wage growth and a flattening of interest rates.
“Towards the end of next year, we expect the market to improve and that we will see a moderate price rise in 2024,” he concluded.
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Despite the downturn in Norway’s property market that most industry experts feared in late 2022 and earlier this year, the ominous forecasts haven’t materialised.
So far this year, house prices have increased by 5.2 percent. That figure includes a small drop in prices over the past two months.
READ MORE: A beginner's guide to buying a home in Norway
New trends emerging
The CEO of the real estate agency Nordvik, Martin Kiligitto, told The Local that the company had seen strong results in the second quarter of 2023. The company has seen an increase in the number of homes sold in the second quarter.
According to Kiligitto, there are some new market trends and changes compared to previous years.
“We have seen a change in the market, including the western part of Norway, that started in September last year.
“The time from when a home was put on the market until it was sold has increased from 17.6 days in the second quarter of 2022 to 27.1 for the same period in 2023.
“However, the number of days used to sell a home has improved - by that, we mean it has decreased - from January.
“At the same time, we moved from a very hot market in the first half of 2022 that cooled off in the second half of the year. This was due to the increase in interest rates, electricity prices, and other commodities individuals buy,” Nordvik’s CEO explained.
House prices to slow down and homes to remain on the market for longer
The industry expert expects price developments in Norway’s real estate market to slow down in the second half of the year, mostly due to the effect of high interest rates.
“It is our assessment that the time from when a home is put on the market until it is sold will increase this autumn.
“We also believe that the price development will gradually slow down in the second half of 2023 because of increased interest rates, higher living costs, and slightly higher unemployment rates.
“On the other hand, a good labour market, high wage growth, low housing construction, migration to the cities and a tight market for rental housing will be able to reduce the fall in prices,” he said.
READ MORE: Young people to struggle in the Norwegian housing market despite price dip
Big demand for small homes
According to Nordvik, smaller apartments in city centres will be the most popular type of property in late summer and autumn this year.
“There has been a high demand for these apartments for quite some time, especially in 2023. The reason for this is twofold.
“First, a limited number of these small apartments are available in the market. Second, many individuals or couples can afford to buy them, even with rising interest rates.
“Young individuals want to live as close to universities, restaurants, work, and other attractions as possible. Being able to walk, cycle, or be in close proximity to public transport is of importance to this segment of the population,” Kiligitto told The Local.
And what about 2024?
Looking ahead, Nordvik’s CEO believes several factors on the horizon might have an impact on the market dynamics.
“We expect house prices to improve in 2024 as a result of wage growth and a flattening of interest rates.
“Towards the end of next year, we expect the market to improve and that we will see a moderate price rise in 2024,” he concluded.
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