Despite’ predictions that rising interest rates and economic uncertainty would chill Norway’s hot housing market, prices for residential property jumped yet again last month. Brokers now think they’ll keep going up because relatively few homes are on the market.
“It seems like many haven’t been put off by what the interest rate hikes mean for their wallets,” Harald Magnus Andreassen, chief economist at Sparebank1 Gruppen, told state broadcaster NRK. He called the 1.2 percent rise in average prices from February to March “surprisingly strong.”
Prices were up on an annual basis by 5.8 percent, according to the national real estate brokers’ organization Eiendom Norge. It presented its statistics for March on Wednesday, just before Norway’s five-day Easter holiday began.
It was the strongest housing price growth in March since 2016 and continues a reversal of price declines last fall. “The housing market in 2023 has shown itself to be less rate-sensitive than many thought,” said Eiendom Norge’s leader Henning Lauridsen, adding that the price growth was also “considerably stronger” than the organization’s own prognosis. He tied that to fewer homes put up for sale than expected, resulting in higher demand than supply.
Other economists at DNB Markets and Nordea were also surprised by the price rise from February to March, when Norwegians were also hit by a sharp increase in prices at the grocery store and still-high electricity rates. They still think higher interest rates are having a calming effect.
“If if wasn’t for higher rates, we would have seen housing prices gallop,” said DNB Markets’ chief economist Kjersti Haugland. More investors are in the market, too, after the government eased borrowing requirements. It’s been possible to buy homes with less capital up front since the new rules took effect from January 1.
NewsinEnglish.no/Nina Berglund
