Home prices in Norway rose by 1.5% in February. Home prices have risen by 6.3% in the last year, Eiendom Norge stated on Thursday.
Adjusted for seasonal variations, prices rose by 0.7% in February.
“Home prices continued to rise sharply in February. Much of the price increase can be explained by the weak supply side,” CEO of Eiendom Norge Henning Lauridsen stated.
He says there has been a significantly lower selection of second-hand homes for sale so far this year.
Average price of NOK 4.2 million
In February, 6,284 homes were sold in Norway, which is 15% less than in the same month last year. Since the New Year, 11,700 homes have been sold, 18.2% fewer than in the same period last year.
The average price for a home in Norway at the end of February was NOK 4,244,759.
It took an average of 38 days to sell a home in February, down from 41 days in January.
Concerned about price growth
The Norwegian Real Estate Association believes that increased borrowing costs will dampen purchasing power and moderate price developments during the spring.
On the other hand, they are worried that the strong inflation will continue.
“The debt burden has reached a historically high level driven by low interest rates and easily accessible credit during the pandemic,” Carl O. Geving, CEO of the Norwegian Real Estate Association, stated.
“If inflation and interest rates rise faster and more than expected, increased housing costs can be a challenge for households with a high debt ratio,” Geving said.
Drammen reports strongest price development
Drammen had the strongest seasonally adjusted price development in February, with an increase of 1.7%. Follo had the weakest price development with 0.8%.
Bodø and Fauske had the strongest twelve-month growth with an increase of 12.8%, followed by Tønsberg and Færder (+12.6%) and Drammen (+11.3%).
Oslo had the weakest development in the twelve-month growth with an increase of 3.3%.
“As Norges Bank announced several interest rate increases in 2022, it is likely that the housing market will develop more moderately over time,” Lauridsen added.
Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance
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