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Is now a good time to buy property in Norway?

As Autumn approaches, many people are considering buying a home in Norway. But is that a smart move? Here's what real estate experts told The Local.

Pictured is a street in Bergen.
Is now the best time to try and buy in Norway? Pictured is a street in Norway. Photo by Lena Borge on Unsplash

Home prices in Norway rose by 1.9 percent in August 2022, according to the most recent housing price statistics from Real Estate Norway (Eiendom Norge).

Adjusted for seasonal variations, prices rose by 0.6 percent. At the end of August, the average price of a home in Norway amounted to 4,601,168 kroner.

“House prices rose sharply in August. It is common for house prices to rise in August, but the growth this year is strong for August, as the seasonally adjusted increase of 0.6 percent shows,” CEO of Eiendom Norge, Henning Lauridsen, stated in a press release. 

“The (central bank’s) key interest rate was raised once again in August and is now back at the same level as before the corona pandemic. 

“So far, the somewhat higher interest rates have not had an impact on the housing market, and that in itself is not surprising since interest rate increases have historically been slower than interest rate reductions. In the longer term, the interest rate will have an effect,” he added.

On the one hand, the Norwegian economy is characterised by high activity and low unemployment. On the other, Norwegians are feeling the pressure of skyrocketing electricity and food prices, as well as overall inflation, as well as rising mortgage repayments and interest rates.

In such turbulent times, many people who are currently paying rent in Norway are considering a purchase of a home to hedge against the volatility in the market.

But is that a good idea?

Consider buying a home – if you’re currently renting

The interest rate in Norway is still relatively low if you compare it to what it was just ten years ago, real estate agent Mads Wickmann at Nordvik Bolig AS told The Local. 

“Historically speaking, in Norway, we see that home prices always increased – it just depends on how much. Look at the crisis in 2007 and 2008. Prices went down in that short period but continued to grow shortly after. The trend is always going up. 

“With that in mind, if you’re renting a property, I’d say that it would be better to buy now – or at least start looking at properties. Remember, if you’re renting, you are just paying the actual owners of the property instead of investing in a property you will own and paying down your debt.

“While we haven’t seen an immediate effect of the increased interest rate in August, and prices rose, there will be an effect in the longer term. Furthermore, home prices in Norway are cyclical – they’re lower in the Autumn and Winter.

“We have some differences in the market after two years of the Covid-19 pandemic, but most years before that, you had prices go up in the first four months of the year, then a period of stagnation, and then a dip from October to December. Then prices start to grow again from January as buyer interest grows and due to the lack of properties on the market,” Wickmann explained.

He advises people to look into buying a property now so that they can participate in bidding rounds as soon as possible – especially if they have a partner or if they’re renting.

“It’s probably harder for single people, but with two wages, couples will likely be able to handle interest rate increases. My opinion? I would rather start looking into buying now than renting. 

“Buy now, don’t wait; start making down payments. As time passes, you will have paid off some of your debt, and there is a chance of the property value increasing,” the Nordvik Bolig real estate agent pointed out.

Stay within your budget

Grethe Wittenberg Meier, head of PrivatMegleren, Norway’s third largest estate agency, agrees with Wickmann. She told The Local that prices are likely to go down this Autumn and that buyers should be out and in the market early.

“Try and see if there are properties you like in the market. See if you can get the right price. Prices will likely go down this Autumn, so it will be a good time to buy. It’s a good idea to get involved in the bidding process in the Autumn. 

“Set a budget, stay within your budget, and you could get lucky. Furthermore, there will be more properties in the market that you can look at in the Autumn,” Meier said.

At the same time, both Wickmann and Meier pointed out that there is a lot of uncertainty in the market. The energy price crisis and overall inflation might affect both the broader economy and housing prices.

So far this year, as Eiendom Norge pointed out in its latest report, there has been a stronger development in housing prices than most experts expected at the start of 2022, and the year as a whole will probably end with a robust overall increase in home prices.

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PROPERTY

Why do all homes in Norway seem to look the same?

Of course not every home in Norway is identical but there are several major trends that are easily identifiable in most cities that might give you the impression that they all look the same.

Why do all homes in Norway seem to look the same?

Before we explain the similarities there is plenty of variety among homes in Norway.

Different regions in Norway have their own styles, and people’s personal tastes and modern trends also play a role.

Furthermore, urban areas are way more eclectic compared to rural and more isolated regions, and at the same time, the biggest cities need to deal with population pressure.

READ MORE: What you need to know about the Norwegian housing model

However, it is undeniable that a few significant trends dominate the landscape in most of Norway’s towns and cities.

The traditional wooden house

The first trend is the traditional wooden house, which is often medium-sized and square.

These homes, painted in classic colours such as white, dark red, ochre yellow, or brown, are omnipresent across Norway.

While you will easily spot them in any smaller town, even the two largest cities – Oslo and Bergen – still boast many traditional wooden houses.

READ MORE: Oslo versus Bergen: Five big differences between Norway’s two largest cities

If you take a walk to Bergen’s Old Town, you’ll find an array of traditional wooden houses in the area behind the UNESCO-protected Bryggen Wharf. Many wooden houses can also be found in the centrally located Verftet neighbourhood on the Nordnes peninsula.

Their uniform appearance stems from historical building practices and the practicality of using wood as a primary construction material in a forest-rich country.

These homes not only serve as a testament to Norway’s architectural heritage but also adapt well to the country’s climate, providing insulation against the cold.

Additionally, local building regulations often dictate specific architectural styles to preserve the cultural heritage of Norwegian towns and villages – especially in neighbourhoods with a rich past.

Lofoten houses

Wooden houses in Reine, Lofoten Islands, northern Norway. Photo by Jonas Geschke on Unsplash

Modern Norwegian housing

The second trend includes more modern housing solutions, such as terraced houses, new builds, and apartment blocks.

These structures are increasingly common in urban areas where space is at a premium. Many construction projects in the outskirts of Bergen feature this kind of development as the city expands to accommodate its growing population.

This trend reflects contemporary architectural styles and is often designed with energy efficiency and sustainability in mind.

The uniformity here is driven by modern urban planning in cities like Oslo, Bergen, Trondheim, and Stavanger.

Aker Brygge

The Aker Brygge wharf area in central Oslo. Photo by Meriç Dağlı on Unsplash

Traditional vs modern: What advocates of the two styles say

Supporters of traditional Norwegian homes argue that these old structures are very durable. They point out that the wood used in homes from 40 to over 80 years ago comes from slow-growing trees, making it dense and rot-resistant.

Compared to modern building materials, which they often view as inferior, they claim that wood in these older homes ensures longevity – as long as the house has been adequately maintained.

READ MORE: What you should know before buying a house in rural Norway

Furthermore, the longevity of old wooden houses in Norway is well-documented. Many homes built in the early 20th century still retain their original structure despite multiple renovations.

As long as the wood remains dry, it can last for decades – or even centuries.

On the other hand, with advancements in building technology, modern houses are designed to minimise heat loss, reduce energy consumption, and lower utility bills – particularly relevant in the cost-of-living crisis plaguing Norway and Europe in recent years.

These homes often feature high-level insulation, double or triple-glazed windows, and advanced heating systems, which make them more environmentally friendly and cost-effective in the long run.

Another key advantage of modern homes is their adherence to strict building codes and standards.

Today, Norwegian houses are built to high specifications, ensuring safety, comfort, and durability. Mandated ventilation systems improve indoor air quality and prevent issues like mould and dampness.

In addition to technical improvements, modern homes are also designed with contemporary lifestyles in mind. Open floor plans and larger windows create bright and adaptable living spaces.

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