Trend: nationwide house prices down 1.05% y-o-y in 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 1.05% during 2018, from a y-o-y decline of 0.6% in 2017 and a growth of 6.3% in 2016. Quarter-on-quarter, house prices dropped 2.7% during the latest quarter.
In Oslo, the capital, house prices rose slightly by 1.05% in 2018 from a year earlier but declined by 2.4% during the latest 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.
In 2018, the total number of residential property sales in Norway fell slightly by 0.6% from a year earlier, according to Statistics Norway. In Oslo, sales fell by 1.2% over the same period.
Norges Bank kept the key rate at 0.75% in December 2018, after two rate hikes over the year. 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: rental yields are low at 3.13%
Oslo apartment costs are expensive at around €8,162 per sq. m.
|Norway: 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$57.36 per barrel in December 2018, far below the average price of US$107.64 per barrel from 2011 to 2014.
In 2018, the Norwegian economy is estimated to have expanded by 2.1%, the highest growth in six years, according to the International Monetary Fund (IMF). The economy is projected to grow again by 2.1% this year and by another 1.9% in 2020.