House prices rose by 1.2 per cent in March. Adjusted for seasonal variations, prices rose by 1.1 per cent.
House prices are now 12.5 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 March. There was a strong rise across the country, with the exception of Oslo, where house prices fell by 1.2 per cent.
- The 12-month growth in house prices is now at almost the same level nationally as in the record year 2016.
- We expect continued growth in house prices and many sales in the coming months. The period from after Easter to the summer holidays is usually the period of the year with the greatest activity in the housing market in Norway. With the increased supply we have seen in March, inflation will probably slow down somewhat towards the summer, says CEO of Eiendom Norge, Henning Lauridsen.
Strong revenue growth and larger offers
In March, 9,665 homes were sold in Norway, which is 44.7 per cent more than in the corresponding month in 2020.
So far this year, 24,035 homes have been sold in Norway, which is 13.2 per cent more than in the same period in 2020.
In March, 10,142 homes were put up for sale in Norway, which is 17.1 per cent more than in the same month in 2020.
So far this year, 24,188 homes have been put up in Norway, which is 2.8 per cent more than in the same period in 2020.
- A record number of homes have been sold in Norway so far in 2021, and in March significantly more homes were sold than in the same month last year. It is related to the corona pandemic that broke out in March last year, which had a major impact on turnover in the housing market in March and April in 2020.
- We expect that the turnover volume will continue to be high in the future, as there has been strong growth in the number of new homes on the market in the last month, Lauridsen says.
It took an average of 43 days to sell a home in March 2021, down from 52 days in February. Oslo had the shortest sales time with 14 days and Ålesund and the surrounding area had the longest sales time with 68 days.
Interest rate increase this year and increased housing construction in the years ahead
Drammen had the strongest seasonally adjusted price development in March, with an increase of 3.5 per cent. Oslo had the weakest seasonally adjusted price development, with a decline of 0.8 per cent.
Oslo had the strongest development in the last 12 months, with an increase of 15.6 per cent. Stavanger had the weakest development in the last 12 months with an increase of 7.9 percent.
- Many areas in Norway now have an annual growth in house prices of over 10 percent, and more up to 15 percent. We have not seen such a strong development in the housing market in Norway since 2016, says Lauridsen.
- Norges Bank announced at an interest rate meeting in March that it is likely that interest rates will rise in the second half of 2021. In our view, this is wise. Because even though sales of new homes have risen sharply recently, it will take a long time before increased housing construction contributes to curbing house price developments.
- There is reason to believe that the pandemic has resulted in a sustained increase in demand for housing. We believe it will take several years before the supply side adapts to the increased demand for housing and holiday homes in Norway, even with a somewhat higher key interest rate, Lauridsen concludes.
On April 13 at 0930-1430 digital Real Estate Norway conference 2021. Arranged among the speakers are central bank governor Øystein Olsen (Norges Bank) and the world's leading housing economist Edward Glaeser (Harvard).
Attend on Facebook to stream the conference.