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PROPERTY

Where in Norway are house prices rising the fastest?

The growth of property prices in Norway this year has surpassed what many industry experts expected, but where in the country are they rising the fastest?

Published: 5 June 2023 16:08 CEST
Updated: 15 June 2023 10:19 CEST
Oslo building
Photo by Marta Santos on Unsplash

Towards the end of 2022, most Norwegian commentators and analysts following the real estate industry agreed that 2023 would be characterised by a cooling housing market, with lower prices.

However, actual market developments have proved these forecasts wrong already and Norwegian households have shown that they are better equipped to handle higher interest rates than what even the central bank (Norges Bank) predicted.

READ MORE: The biggest issues facing first-time home buyers in Norway in 2023

Several factors are currently keeping housing prices high, including high wage growth, a high degree of job security, increased population growth, and, especially thee low number of new houses being built.

The latest housing price figures

House prices in Norway increased by 0.8 percent from April to May of 2023, according to the latest figures from Real Estate Norway (Eiendom Norge), but certain parts of the country are seeing prices rising faster than others.

Notable price hike in the capital

In Oslo, house prices have notably risen over the past six months. So far this year, prices in the capital have risen by 7.3 percent.

Due to price dips late in 2022, housing prices in Oslo are now 0.5 percent higher than they were 12 months ago. Still, that is 0.2 percent higher than the previous all-time high registered in August last year, according to the newspaper Dagens Næringsliv (DN).

Managing Director Carl O. Geving of the Norwegian Association of Real Estate Agents (NEF) pointed out that Oslo prices are so high that many people will likely struggle to take out loans.

“A lot of people will struggle to secure financing when the prices per square metre are over 92,000 kroner on average and the mortgage interest rate is approaching five percent. This will probably limit price growth in Oslo in the near future,” Geving said.

Strongest price growth in Kristiansand and Stavanger

The historic region of Romerike, in south eastern Norway, registered the most vigorous seasonally adjusted price development (meaning that prices were modified to take into account seasonal fluctuations such as higher prices in the Spring/Summer and lower prices in Autumn/Winter). In May, prices in Romerike rose by 1.1 percent, according to Real Estate Norway.

Bodø and Fauske had the weakest seasonally adjusted price development, with a seasonally adjusted price decrease of one percent.

So far in 2023, the biggest price rises were seen in the southern Norwegian cities of Kristiansand and Stavanger (with their surroundings), with an increase of 12.5 and 11.8 percent, respectively.

The weakest development so far this year was seen in the northern city of Tromsø, with an increase of 4.4 percent.

“So far this year, Kristiansand and Stavanger and their surroundings stand out with great growth in house prices. Kristiansand has long had a price level well below the other medium-sized cities in Norway. Now, however, the price level in Kristiansand is about to rise to the same level as the other cities in Norway,” Lauridsen said.

“Unfortunately, new home sales are still very weak. Hopefully, the robust developments in the second-hand housing market will, at some point, also spill over into the market for new housing, provided that the builders manage to get control over the costs.

“There is a need for new homes, and they are not currently being built. It is absolutely necessary to build enough homes in Norway so that we avoid imbalances in the housing market further along the road,” the head of Real Estate Norway said.

It took an average of 35 days to sell a home in Norway in May, down from 40 days in April.

Moderate price changes expected in coming months

Real Estate Norway expects price growth to slow down in the months ahead.

“Many homes were sold in May, and so far this year, more second-hand homes have been sold in Norway than at the same time in 2022.

“There has also been great growth in the number of new second-hand homes on the market throughout the month. This indicates a more moderate development in house prices in the coming months,” Lauridsen said.

“So far this year, house prices have risen far more than everyone expected at the start of the year. If things follow typical patterns and fall through the autumn, we will probably end up with an increase of 3-4 percent in 2023,” he said.

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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.

Published: 25 June 2024 12:47 CEST
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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