Nationwide house prices up 5.75% during 2020

After a lacklustre performance in the past three years, Norway’s housing market growth is now gathering pace. The inflation-adjusted nationwide house price index rose by 5.75% in 2020 from a year earlier, a sharp improvement from a y-o-y growth of 0.95% in 2019 and its best performance since 2016. Quarter-on-quarter, house prices rose slightly by 0.27% in Q4 2020.

The housing market’s slower growth in recent years can be partly attributed to the implementation of stricter mortgage rules on January 1, 2017, which were focused on restraining house prices in Oslo.

Demand rising again, construction activity remains weak. 

In Q3 2020, residential property sales in Norway rose by 6.1% to 27,039 units from a year earlier, according to Statistics Norway. Despite this, dwelling starts fell by 5.4% y-o-y to 29,948 units during 2020 while completions fell 2.5% to 29,604 units.

Rents, rental yields: rental yields are low at 3.13%

Oslo apartment costs are expensive at around €8,162 per sq. m. 

Norway: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Oslo € 979,440 € 2,556 3.13%

Recent news: In January 2021, Norges Bank held its key rate unchanged at a record low of 0%, following four consecutive rate cuts since March 2020. In 2020, Norway’s economy contracted by 2.5%, its weakest performance since 1945 but still far less severe than in most other European nations, according to Statistics Norway. In fact Eurozone countries slumped by an average of 6.8% last year. The Norwegian economy is projected to grow by 3.6% this year, based on IMF forecasts.