House prices in Norway continue stronger than expected growth
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- 15 May 2023
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Real Estate Norway's latest figures reveal that the average cost of a house in Norway has surged to 4,595,966 kroner. This represents a 6.8% increase from the beginning of the year, with prices rising by 1% in April alone. The CEO of Real Estate Norway, Henning Lauridsen, has described the rise as "sensational", particularly in light of the fact that the key interest rate has reached its highest level since 2008. It appears that the housing market is less sensitive to interest rates than previously believed, as the development of the Norwegian economy and a strong labour market have supported price growth, along with relaxed lending regulations.
Regions such as Kristiansand and the Stavanger area have seen the biggest house price increases this year, with rises of 10.8% and 10.4% respectively. On the other hand, Tromsø in northern Norway has experienced the weakest price growth, with homes costing only 4.4% more than at the beginning of the year. The Norwegian Association of Real Estate Agents has identified the shortage of new homes as the primary factor driving up the price of second-hand homes. Unfortunately, this trend is likely to lead to a tighter rental market as higher financing and housing costs could force more people to rent at a relatively high price.
