Strong rise in house prices in February
House prices rose by 2 per cent in February. Adjusted for seasonal variations, prices rose by 1.3 per cent.
House prices are now 9.7 per cent higher than a year ago.
- The strong price development we have seen in the housing market over the past year and a half continued in February. There was a strong rise across the country, but strongest in Oslo, Bodø w / Fauske and Stavanger w / surroundings.
- An increase of 2 per cent and 1.3 per cent seasonally adjusted in February is among the strongest February months in the history of house price statistics. Only February 2009, when the market recovered from the financial crisis, was stronger.
- We expect continued growth in house prices going forward and many sales. As the situation is now, only higher interest rates can dampen the sharp rise in prices in the housing market, says CEO of Eiendom Norge, Henning Lauridsen.
More sales and shorter sales time
In February, 7,393 homes were sold in Norway, which is 3.7 per cent more than in the corresponding month in 2020.
So far this year, 14,329 homes have been sold in Norway, which is 1.3 per cent less than in the same period in 2020.
In February, 7,400 homes were put up for sale in Norway, which is 2.1 per cent less than in the same month in 2020.
So far this year, 13,993 homes have been sold in Norway, which is 5.5 per cent less than in the same period in 2020.
- Significantly more homes were sold in February this year compared with the same period last year. We expect the turnover volume to be high in the future, even though the number of homes put up for sale this year is somewhat lower than last year at the same time, says Lauridsen.
It took an average of 52 days to sell a home in February 2021, down from 60 days in January. Oslo had the shortest sales time with 18 days and Tromsø had the longest sales time with 78 days.
Only higher interest rates will dampen house prices now
Oslo had the strongest seasonally adjusted price development in February, with an increase of 2.4 per cent. Tønsberg w / Færder had the weakest seasonally adjusted price development with an increase of 0.3 per cent.
Oslo had the strongest development in the last 12 months, with an increase of 15.2 per cent. Tromsø had the weakest development in the last 12 months with an increase of 5.6 percent.
- Several areas in Norway now have an annual growth in house prices of over 10 percent. We have not seen such a strong development in the housing market in Norway since 2016, says Lauridsen.
- A too strong development in house prices will increase the risk of financial imbalances in Norway. This means that we believe it will be right for Norges Bank to raise interest rates this year. In our view, it would be wise for Norges Bank to raise interest rates already at the interest rate meeting in June, Lauridsen concludes.