Nationwide house prices up 0.69% during the year to Q3 2019
After almost eight years of uninterrupted growth, Norway’s housing market is now stabilizing. The inflation-adjusted nationwide house price index rose slightly by 0.69% during the year to Q3 2019, after a y-o-y decline of 0.45% in Q2 2019, a growth of 0.04% in Q1 2019 and annual falls of 1.05% in Q4 2018 and 0.32% in Q3 2018. Quarter-on-quarter, house prices fell by 1.12% during the latest quarter.
The slowdown can be partly attributed to the implementation of stricter mortgage rules on January 1, 2017, which were focused on restraining house prices in Oslo.
Yet demand is rising again. During the first three quarters of 2019, the total number of residential property sales in Norway rose by 13.4% y-o-y to 40,070 units, according to Statistics Norway.
The Norges Bank kept the key rate at 1.5% in October 2019, following a 25-basis point hike in September, noting that economic outlook is little changed since last month.
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: Europe’s Brent crude oil spot price averaged US$59.71 per barrel in October 2019, more than 26% lower than the previous year and far below the average price of US$107.64 per barrel from 2011 to 2014. Falling petroleum prices have hurt Norway in recent years, with the economy growing by just 1.1% in 2016 and 1.3% in 2018, after growths of 2% in both 2014 and 2015. Petroleum is the country's largest industry, accounting for more than 20% of GDP, and around 47% of exports by value.
The economy is projected to grow by 1.9% this year and another 2.4% in 2020, based on the latest projections from the International Monetary Fund (IMF).