It’s getting even more expensive than usual to buy a home in Norway. The central bank (Norges Bank) raised its policy rate by a quarter-point, just after the national real estate brokers’ association announced another rise in housing prices.
Analysts had been expecting an interest rate hike, given the central bank’s determination to bring down inflation to the desired rate of just 2 percent. Instead it’s been running at well over 3 percent (currently 3.6 percent) and then came a rush of wage settlements with average pay raises of 4.4 percent.
Norges Bank’s monetary policy committee ended up settling on just what Norwegian economists and analysts had predicted: Members raised the policy rate to 4.25 percent, and it’s widely predicted to rise further, to 4.5 percent later in the year.
“Inflation is too high and has run above target for several years,” said Norges Bank Governor Ida Wolden Bache when announcing the rate hike on Thursday. “The information on the inflation outlook we have received in recent weeks supports the analyses we presented in March.”
That’s when Bache warned of interest rate hikes and hinted they’d likely return to the level they were last year before two quarter-point reductions were made. Now the US’ and Israel’s war on Iran has sent up the price of oil and gas, while international tensions are causing “substantial uncertainty about the economic outlook.”
That’s also likely to spark another quarter-point rise in the policy rate, with some analysts expecting it will land at 4.5 percent before the summer holidays and other predicting a rise later in the year. It all boils down to mortgage rates of around 6 percent of more, and higher monthly payments for homeowners.
Housing prices themselves, meanwhile, rose again last month overall, but not all in line with the inflation rate. Norway’s real estate brokers’ organization Eiendom Norge reported a revived market in April, especially in Stavanger, Kristiansand and Bergen, where prices rices rose an average 5.6 percent during the first four months of the year despite fewer overall sales.
Sales prices in Oslo, meanwhile, were surprisingly low, up just 2.5 percent during the same time period. There was no clear explanation for the relatively low sales price level in the Norwegian capital, and the organization warned that if price levels don’t pick up, they may end up with an overall decline in Oslo for the year as a whole.
The organization reported sales nationwide of 9,681 homes in April, 2.3 percent fewer than in April 2025. A total of 35,221 homes have changed owners so far this year, and that’s 3.3 percent less than in the first four months of 2025.
While April sales were relatively swift in Bergen and Stavanger, with an average of 14- and 17 days on the market respectively, they were slowest in Fredrikstad and Sarpsborg (103 days).
NewsinEnglish.no/Nina Berglund
