Nationwide house prices up 6.83% during the year to Q3 2021

After a lackluster performance in the past three years, Norway’s housing market is now making a comeback. The inflation-adjusted nationwide house price index rose by 6.83% in Q3 2021 from a year earlier, a sharp improvement from a y-o-y growth of 2.89% in Q3 2020. Yet quarter-on-quarter, house prices were down 1.76% in Q3 2021.

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. 

Residential property sales in Norway rose by 11.1% to 77,992 units In the first three quarters of 2021, from a year earlier, following a 3.6% rise in 2020, according to Statistics Norway. 

Despite strong demand, construction activity remains weak. In the first three quarters of 2021, dwelling starts rose by 2.6% y-o-y to 21,968 units while completions dropped 1.5% to 20,511 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 November 2021, Norges Bank held its key rate unchanged at 0.25%, following a 25 basis points rate hike in September 2021, amidst improving economic conditions. 

Norway’s economy grew by 6.2% year-on-year in Q2 2021 and by another 5.1% in Q3 2021, following four straight quarters of y-o-y falls, amidst the easing of pandemic-related restrictions, according to Statistics Norway. The Norwegian economy is projected to grow by 3% this year, following a slight decline of 0.8% in 2020, according to IMF forecast.