Even in the midst of the Corona crisis, or perhaps because of it, Norwegians bought and sold homes at levels that set new records for both prices and sales volume last year. Never before have so many residences changed hands, even in the usually quiet month of December.
Year-end figures from the national real estate organization Eiendom Norge show that housing prices rose 8.7 percent on average nationwide in 2020. In Oslo, the annual price increase averaged 12 percent, a level so high that even the head of Eiendom Norge called it “in excess of what’s healthy.”
Henning Lauridsen could also note that housing prices in the Norwegian capital have more than doubled just since 2010.
“It’s well-documented in research that the combination of low interest rates and low levels of homebuilding is explosive,” Lauridsen stated in a press release summing up residential real estate activity for the year and last month. He called on local officials and builders to “get together and approve new housing projects in the capital. The housing market needs all the housing units it can get.”
Oslo prices nearly double the national average
The average price for a home nationwide landed at NOK 44,099 (USD 5,249) per square meter. In Oslo the average was NOK 81,137 but it’s no longer unusual for homes in attractive areas of the city to sell for NOK 100,000 per square meter or more.
The Oslo market also logged the shortest amount of time from listing to sale, at just 22 days. The national average was 60 days and it took longest to sell homes in the area around Hamar and Stange, at 83 days.
With Norway’s key policy rate still at 0.0 percent and mortage rates record low as a result, Lauridsen foresees ongoing price growth this year and this month. “We’re expecting 4 percent price growth in January,” he said.
Market defies Corona crisis
Norway’s already-strong housing market has remained so despite the economic slowdown caused by the Corona virus and resulting record-high unemployment. The majority who have secure jobs, however, have been saving money at record rates and haven’t been able or willing to spend much on travel, dining out, entertainment. Most everyone is spending much more time at home, and that’s prompted many Norwegians to invest even more in their homes, or move to new homes, especially at a time when conventional savings accounts aren’t earning much at all.
There was no downturn in the residential real estate market in December, either, a month when sales are generally sluggish because of the Christmas holiday season. The Corona crisis halted most all holiday parties and entertaining, however, and the market boomed with sales up 22.9 percent over December 2019. There was also a 6.5 percent increase in the number of homes put up for sale.
A total of 99,581 homes were sold in 2020, up 6.7 percent from 2019. There was a 1.3 percent decline, though, in homes put up for sale, which is why Lauridsen is most concerned that supply is not meeting demand despite lots of residential construction projects currently underway in Oslo and elsewhere.