Housing prices in Norway experience mixed trends as inflation outpaces growth

Mia Skogstad, a resident of Bodø, reflects on her decision to enter Norway’s housing market during its peak in 2020, when property prices surged beyond estimates. “I wish others could access the market too, so it’s somewhat good that prices are becoming cheaper,” she noted. However, since then, while housing prices have generally increased, they have not kept pace with inflation, which has outstripped price growth in most regions across Norway.

When adjusted for inflation, property values in Oslo have actually decreased by 5% over the past three years. According to Kyrre Knutsen, chief economist at SR-Bank, real estate prices have seen a significant drop of nearly 20% in some areas. Only Stavanger and Kristiansand have experienced real price increases during this period.

Despite the recent slow down in the housing market, Knutsen believes the situation could have been much worse given the rapid rise in interest rates from 0% to 4.5% in just over two years. “I expected a more negative outcome,” he stated, referencing Norway’s high levels of household debt.

Skogstad, who purchased her apartment without plans to sell anytime soon, acknowledged her initial frustration at paying 300,000 kroner above market value, but values the security of ownership. As for the future, Knutsen remains cautiously optimistic, suggesting that lower interest rates could lead to a recovery but warns that the expectation of forever-increasing housing prices may no longer hold true.

Housing prices in Bodø have increased by 2% over the last three years, but after accounting for inflation, they have dropped by 14%.