Norway

Norway Residential Real Estate Market Analysis 2024

Lalaine C. Delmendo

Norway's housing market conditions continue to weaken, as property demand plunges amidst rapidly rising interest rates and a sharp economic slowdown.

Table of Contents

Housing Market Snapshot

In Q2 2024, the nationwide house price index increased slightly by 1.51% from the same period last year, following a meager growth of 1.2% in Q1 2024, and year-on-year declines of 0.73% in Q4 2023, 1.26% in Q3, 0.14% in Q2, and 0.07% in Q1, based on figures from Statistics Norway. Yet when adjusted for inflation, Norwegian house prices actually dropped 1.53% over the same period.

On a quarterly basis, house prices were up by 4.23% (3.17% inflation-adjusted) in Q2 2024.

During the year to end-Q2 2024:

  • In Oslo including Bærum, the house price index rose by 2.48% (but dropped 0.59% when adjusted for inflation), following a y-o-y increase of 1.21% in Q1 2024. During the latest quarter, house prices increased 4.22% (3.15% inflation-adjusted) q-o-q.
  • In Stavanger, house prices rose by a modest 3.61% in Q2 2024 from a year earlier (0.51% inflation-adjusted), a slowdown from a y-o-y growth of 5.4% in the previous quarter. Quarter-on-quarter, house prices were up 4.29% in Q2 2024 (3.23% inflation-adjusted).
  • In Bergen, the house price index was up by 2.62% in Q2 2024 from a year earlier (declined by 0.45% inflation-adjusted), following a y-o-y rise of 1.42% in Q1 2024. On a quarterly basis, house prices increased 3.5% (2.44% inflation-adjusted).
  • In Trondheim, house prices increased by a minuscule 0.29% in Q2 2024 from a year earlier (fell by 2.71% when adjusted for inflation), following a y-o-y increase of 1.48% in Q1 2024. During the latest quarter, house prices were up by 1.02% (unchanged in real terms) q-o-q.

Norway's house price annual change

Demand is falling rapidly. During 2023, the total number of residential property transactions fell by 4.9% to 88,686 units, following a decline of 9.3% in 2022. Then in the first quarter of 2024, transactions plunged further by 15.8% y-o-y to 15,681 units - the lowest sales recorded for any quarter since Q1 2016.

Norway House Price Indices graph

Residential construction activity continues to decline this year, following a quiet 2023. In the first six months of 2024, starts dropped 7.6% y-o-y to 9,998 units, and dwellings under construction declined by 10.7% to 38,655 units, according to Statistics Norway. Likewise, completions plummeted by 16.5% to 12,261 units over the same period.

The cooling housing market is not surprising given the wider economy's lackluster performance. During 2023, Norway's mainland economy grew by a minuscule 0.7%, a sharp slowdown from annual expansions of 3% in 2022 and 3.9% in 2021, amidst a decline in private consumption and construction investment. Except for the year 2020 when the economy suffered a pandemic-induced contraction of 1.3%, last year's performance had been the country's weakest since 2009.

The Norwegian government expects the mainland GDP growth to remain weak this year, projected at around 0.8% - at par with the IMF's forecast.

Demand Highlights

Property demand falling

During 2023, the total number of residential property transactions fell by 4.9% to 88,686 units, following a decline of 9.3% in 2022 and an increase of 7.1% in 2021, according to figures from Statistics Norway.

By property type:

  • Detached houses: transactions dropped 4.8% y-o-y to 31,727 units in 2023, after falling by 9.1% in the prior year and rising slightly by 0.5% two years earlier.
  • Houses with 2 dwelling units: transactions fell by 6.7% y-o-y to 7,751 units last year, following a drop of 9.5% in 2022 and an increase of 4.4% in 2021.
  • Multi-dwellings: transactions were down by a modest 2.6% y-o-y to 38,667 units last year, after a decline of 9.7% in 2022 and a growth of 11.9% in 2021.
  • Row houses: transactions declined by 9.3% y-o-y to 6,580 units in 2023, after falling by 5% in 2022 and increasing by 11.3% in 2021.
  • Other buildings: transactions dropped 15.5% y-o-y to 3,949 units last year, following a contraction of 11.6% in 2022 and a growth of 20.1% in 2021.

In the first quarter of 2024, residential property transactions in Norway plunged further by 15.8% to 15,681 units as compared to the same period last year. It was the lowest sales recorded for any quarter since Q1 2016.

Norway Residential Property Transactions graph

Supply Highlights

Residential construction activity falling

All indicators point to a depressed residential construction sector in the country.

  • Dwelling starts plummeted by 23.6% y-o-y to 22,807 units in 2023, following a slight decline of 0.9% in 2022 and a meager growth of 0.7% in 2021, according to Statistics Norway.
  • Dwellings under construction fell by 13% y-o-y to 41,442 units in 2023, after declining slightly by 0.2% in 2022 and rising by a minuscule 0.4% two years earlier.
  • Dwelling completions were down slightly by 0.1% y-o-y to 27,974 units last year, its fifth consecutive year of decline.

In the first six months of 2024, starts dropped by 7.6% y-o-y to 9,998 units, and dwellings under construction declined by 10.7% to 38,655 units. Likewise, completions plummeted by 16.5% to 12,261 units over the same period.