Rise in house prices in August
House prices rose by 1.1 per cent in August 2020. Adjusted for seasonal variations, prices rose by 0.3 per cent.
House prices are now 4.3 per cent higher than a year ago.
- House prices rose in August, which is normal for the month. The strong growth we have seen in house prices in recent months is now declining, and we expect that house prices will follow the normal economic cycle with falling prices towards the end of the year, says CEO Henning Lauridsen of Eiendom Norge.
- A record number of homes are also sold in August. The growth in the number of transactions continues, and never before have so many homes been sold in Norway at the end of August as this year.
- With unchanged framework conditions for home buyers through the mortgage regulations and low interest rates, we expect a stable development in the housing market in the slightly longer term. In light of the fact that the corona situation will most likely be long-lasting, we believe our home will be even more important for most Norwegians in the coming years, says Lauridsen.
Turnover continues to increase
In August, 9,964 homes were sold in Norway, which is 10.2 per cent more than in the corresponding month in 2019. So far this year, 66,213 homes were sold in Norway, which is 3.5 per cent more than at the same time in 2019.
In August, 11,667 homes were put up for sale in Norway, which is 8.2 per cent less than in the same month in 2019. So far this year, 70,771 homes have been put up for sale, which is 2.9 per cent less than at the same time last year.
- A record number of homes are still being sold in Norway, as we have also observed for several months. At the same time, there will be slightly fewer homes than in 2019, but the number of new homes on the market is high compared with previous years, says Lauridsen.
It took an average of 54 days to sell a home in August 2020. This is a reduction from 67 days in July. Oslo had the shortest sales time with 25 days and Kristiansand had the slowest sales time with 84 days.
- The sales period is stable and at a somewhat higher level than in previous years. The stable sales time testifies to a healthy housing market, says Lauridsen.
More moderate price development going forward
Oslo had the strongest seasonally adjusted price development in August, with an increase of 1.2 per cent. The weakest seasonally adjusted price development was in Stavanger and the surrounding area, with a decrease of 1.1 per cent.
Oslo had the strongest 12-month growth with an increase of 6.1 per cent, while Stavanger and the surrounding area had the weakest development in the last 12 months with an increase of 0.9 per cent.
- The development in the housing market has been very strong through the spring and summer. In August, the development is close to what is a normal development for the month.
- In our opinion, the zero interest rate has now been priced into the housing market, and we now expect house prices to fall normally through the autumn. With a weaker development through the autumn, we expect that house price development nationally in 2020 will end close to Eiendom Norge's forecast with an increase of 3 per cent. In that case, 2020 will be the third year in a row with moderate price developments in the housing market, Lauridsen concludes.