Nationwide house prices up 3.26% during the year to Q1 2022

Norway’s house prices continue to rise, albeit at a much slower pace. The inflation-adjusted nationwide house price index rose a modest 3.26% in Q1 2022 from a year earlier, a slowdown from y-o-y growth of 7.94% in Q1 2021. Quarter-on-quarter, house prices increased 3.9% during the latest quarter.

Before that the housing market was more or less steady, with house prices rising by a meager 0.95% in 2019, falling by 1.05% in 2018 and 0.6% in 2018, after the implementation of stricter mortgage rules on January 1, 2017, which were focused on restraining house prices in Oslo. 

 

Demand is now falling, construction activity remains weak. 

Construction activity remains weak. In 2021, dwelling starts rose by a minuscule 0.7% y-o-y to 30,126 units while completions dropped 2.6% to 28,398 units. 

In Q1 2022, residential property sales in Norway fell by 7.4% to 19,320 units from a year earlier, in contrast to y-o-y increases of 6.8% in 2021 and 3.6% in 2020, according to Statistics Norway. 

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 May 2022, the Norges Bank kept its key rate unchanged at 0.75%, following three consecutive rate hikes of 25 basis points each since September 2021, to curb rapidly rising inflation. 

Norway’s economy grew by 4.8% in Q1 2022 from a year earlier, its fourth straight quarter of y-o-y expansion. On a quarterly basis, the economy contracted by 1% during the latest quarter, amidst supply chain disruptions and the adverse impact of the Ukraine crisis.

The International Monetary Fund (IMF) expects the Norwegian economy to expand by 4% this year, following 3.9% growth in 2021 and a 0.7% contraction in 2020.