The Norwegian property market has seen a fall in prices during the autumn of 2023.
The most significant contributing factor has been the sharp rise in interest rates throughout the year, making mortgages more expensive and dampening demand.
Norges Bank – the country’s central bank – recently raised its key interest rate to 4.5 percent, further affecting housing market dynamics.
However, the central bank’s projections for housing prices in 2024 differ from more recent analyses by other institutions and organisations.
What do the latest forecasts say?
DNB Eiendom, a subsidiary of Norway’s largest bank, DNB, believes that the housing market in 2024 will closely resemble the trends observed in 2023.
According to Nils Robert Elven, the regional manager in Oslo for DNB Eiendom, 2024 is expected to conclude with a modest price increase of two or three percent percent.
“When 2024 is behind us, we believe the total score will show that we have a well-functioning housing market with weak growth. We think 2024 will end with a price increase of up to two-to-three percent,” Elven said.
The primary factors influencing this somewhat conservative forecast are interest rates and inflation.
According to DNB Eiendom, the initial months of 2024 would see house prices fall due to the combination of interest rates and inflation.
However, as interest rates stabilise and decrease, coupled with anticipated gains in wage settlements during the latter half of the year, DNB expects the housing market to gain momentum.
DNB Eiendom also thinks there may be limited new home construction in Norway moving forward, potentially putting long-term pressure on the second-hand housing market.
Real Estate Norway (Eiendom Norge), the industry organisation that compiles monthly housing price statistics, has a more bullish