Nationwide house prices up 3.31% during 2021

The nationwide house price index (inflation-adjusted) rose by 3.31% in 2021, a slowdown from a y-o-y growth of 5.75% in 2020. Yet quarter-on-quarter, house prices were down 3.05% in Q4 2021.

The housing market had been more or less static three previous years, with house prices rising by a meagre 0.95% in 2019, and falling by 1.05% in 2018 and 0.6% in 2018 after the implementation of stricter mortgage rules on January 1, 2017 focused on cooling Oslo’s house prices.

Demand rising, construction activity remains weak. 

In 2021, residential property sales in Norway rose by 6.8% to 106,882 units from a year earlier, following a 3.6% rise in 2020, according to Statistics Norway. 

Despite strong demand, 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.

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 January 2022, Norges Bank held its key rate unchanged at 0.5%, following consecutive rate hikes of 25 basis points in December and September 2021, amidst improving economic conditions.

Norway’s mainland economy grew by 4.2% in 2021 from a year earlier, in contrast to the previous year’s 2.3% contraction. This was its best performance since 2007, according to Statistics Norway.

The Norwegian economy is projected to grow by 4.1% this year and by another 2.9% in 2023, according to IMF forecast.