Strong rise in house prices in March
House prices rose by 1.2 per cent in March 2023. Adjusted for seasonal variations, prices rose by 0.5 per cent.
So far this year, house prices in Norway have risen by 5.8 per cent.
The average price for a home in Norway was NOK 4,487,285 at the end of March.
- House prices rose sharply in March. So far this year, house prices have risen by 5.8 per cent and most of the fall in house prices through the autumn of 2022 has now been recovered, says CEO Henning Lauridsen of Eiendom Norge.
- In 2023, the housing market has proven to be less sensitive to interest rates than many thought. The rise in the first quarter is significantly stronger than our forecast for 2023 from December, he says.
- The strong development must be explained by the fact that the Norwegian economy is doing much better than many imagined at the start of the year, in combination with the easing of the lending regulations from New Year.
- In addition, fewer second-hand homes have been put up for sale throughout March. If there is no spring flood on the supply side after Easter, we will still see growth in house prices going forward, and that even if interest rates were to be raised further, says Lauridsen.
Many homes sold
In March, 8,751 homes were sold in Norway, which is 2.5 percent fewer than the corresponding month in 2022.
So far this year, 22,375 homes have been sold in Norway, which is 8.2 per cent more than in the same period in 2022.
In March, 8,535 homes were put up for sale in Norway, which is 16.3 percent fewer than in the same month in 2022.
So far this year, 21,401 homes have been put up in Norway, which is 5.1 percent fewer than in the same period in 2022.
- Many homes have been sold in Norway in the first three months of the year, and it is only in the record year 2021 that more homes have been sold during the first quarter, says Lauridsen.
It took an average of 42 days to sell a home in March, down from 49 days in February. Bergen had the fastest selling time with 23 days. Tromsø had the longest sales time with 69 days.
- The sales time decreases as is normal for the season, and it is still possible to sell a property quickly in Norway, he says.
Low housing construction will put pressure on prices
Kristiansand had the strongest seasonally adjusted price development in March, where prices rose by 1.7 per cent.
Bergen had the weakest seasonally adjusted price development, with a seasonally adjusted decrease of -0.6 per cent.
The strongest development so far in 2023 is in Kristiansand and Stavanger and its surroundings, with an increase of 9.1 per cent. While the weakest development so far this year is Tromsø with an increase of 3.5 per cent.
- House price developments in the first months of the year are surprisingly strong. At the same time, it is paradoxical that new home sales continue to decline month by month, according to Boligprodukterene. We now have the lowest sales of new homes since the financial crisis and at the same time strong population growth, says Lauridsen.
- Low housing construction in the future will put pressure on prices in the second-hand housing market. This is particularly precarious in Oslo, where it is reported that construction case processing and regulation are only getting slower and slower. It is symptomatic in that respect that only under 200 new homes have been launched for sale in Oslo by 2023, according to our member company Røisland & Co.
- In addition, construction costs have been raised to a new level following the strong rise in material prices in 2021 and 2022. This is a problem for housebuilders here and now, but it is also a political problem. We expect Housing Minister Sigbjørn Gjelsvik (Sp) to do something about the high construction costs before his announced housing announcement is presented in spring 2024, concludes Lauridsen.