Trend: nationwide house prices down 0.32% y-o-y in Q3 2018
After almost eight years of uninterrupted growth, Norway’s housing market is cooling sharply, especially in the capital, Oslo. The inflation-adjusted nationwide house price index dropped 0.32% during the year to Q3 2018, from a y-o-y growth of 0.96% in the same period last year. Quarter-on-quarter, house prices dropped 2.23% during the latest quarter.
In Oslo, the capital, house prices rose slightly by 0.71% in Q3 2018 from a year earlier but declined by 1.75% from the previous quarter.
Analysis: 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.
Sales of all housing types fell by 0.7% to 54,945 in 2017, while sales of new homes plunged 22%.
Norges Bank kept the key rate at 0.75% in October 2018, after raising it by 25 basis points last September, amidst continued economic upturn and tamed inflation. Falling petroleum prices have hurt Norway in recent years, with the economy growing by just 1.1% in 2016 and 1.8% in 2017, 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.
Rents, rental yields: Unavailable in Norway
Recent news: Europe’s Brent crude oil spot price surged 40.9% y-o-y to US$81.03 per barrel in October 2018, but still far below the average price of US$107.64 per barrel from 2011 to 2014.
Norway’s economy is expected to expand by 2.1% this year, from an annual average growth rate of 1.4% in the past eight years.