Housing prices in Norway fell in October – experts believe the peak may have been reached

Bjørvika - Houses - constructionPhoto: Ole Berg-Rusten / NTB
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Housing prices in Norway fell by 0.4% in October. The housing price peak may have been reached – for now, market analyst Randi Marjamaa believes.

With the decline in October, house prices have fallen for the second month in a row. Randi Marjamaa, head of the retail market at Nordea Norway, believes this development will continue.

“The housing peak may have been reached for now. There has been strong price growth over a long period of time. We now expect stable price development going forward. Still, we can experience that certain periods will stand out – prices can both rise and fall,” she commented.

Adjusted for seasonal variations, prices rose by 0.2%, according to new figures that Eiendom Norge showed at a press conference on Wednesday morning.

Stronger than normal

October is typically a weak month in the housing market, and the decline is smaller than analysts at DNB had expected in advance. They predicted a fall in house prices of around 1% in nominal terms and expected that prices would also decrease when adjusted for seasonal variations.

With the last month’s development, house prices have now risen by 7% in the last twelve months. The average price for a home in Norway was NOK 4,247,937 in October 2021.

“House prices in Norway developed stronger in October than normal for the month, and most areas in the country had a strong development. The exceptions were Stavanger and Kristiansand, where development was weaker than normal,” Henning Lauridsen, CEO of Eiendom Norge, said.

Weakest price growth in Oslo

Oslo is one of the major housing-pressure areas in Norway, and in 2020 the capital had the strongest house price growth.

However, this year, it is likely that Oslo will have the weakest price growth of the large cities in Norway. In Oslo, prices fell 0.6%, down 0.1% when seasonally adjusted for October. The value of second-hand homes has now fallen in seven of the last eight months.

Director of the Norwegian Real Estate Association, Carl O. Geving, also believes that the time for strong price growth may be over for now.

“At the end of the pandemic and the beginning of a period of rising interest rates, we believe that the strong rise in house prices is history. Oslo is leading the way and now has the weakest price growth of all the big cities,” he said.

“Everything is now in place for weaker price growth in the years to come. This is good news, especially for first-time buyers who want to experience somewhat less competition in the housing market.”

Bodø

Bodø had the strongest seasonally adjusted price development in October, with Fauske and Trondheim, with an increase of 1.1%. Fauske has also had the strongest twelve-month growth, with an increase of 14.9%.

“As the market stands now, the housing market in Bodø with Fauske differs markedly from all other areas in the country,” Lauridsen said.

Stavanger and its surroundings had the weakest seasonally adjusted price development, with a decline of 1.1%.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayNews

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