Nationwide house prices down 0.37% during the year to Q2 2019
Norway’s housing market is cooling sharply, after almost eight years of uninterrupted growth. The inflation-adjusted nationwide house price index fell by 0.37% during the year to Q2 2019, after a meagre growth of 0.04% in Q1 2019 and y-o-y declines of 1.05% in Q4 2018, 0.32% in Q3, 0.73% in Q2 and 3.01% in Q1. Quarter-on-quarter, house prices increased 2.33% during the latest quarter.
The slowdown can be partly attributed to the implementation of stricter mortgage rules on January 1, 2017, which were focused on restraining house prices in Oslo. In Q2 2019, the total number of residential property sales in Norway fell by 10.5% y-o-y to 16,412 units, according to Statistics Norway.
Norges Bank kept the key rate at 1.25% in August 2019, after three rate hikes in the past twelve months, in an effort to rein in inflationary pressures.
Rents, rental yields: rental yields are low at 3.13%
Oslo apartment costs are expensive at around €8,162 per sq. m.
|Norway: typical city centre apartment buying price, monthly rent (120 sq. m)|
|Buying price||Rate per month||Yield|
|Oslo||€ 979,440||€ 2,556||3.13%|
Recent news: Europe’s Brent crude oil spot price averaged US$63.92 per barrel in July 2019, almost 14% lower than last year, and far below the average price of US$107.64 per barrel from 2011 to 2014. Falling petroleum prices have hurt Norway in recent years, with the economy growing by just 1.1% in 2016 and 1.4% in 2018, after growth of 2% in both 2014 and 2015. Petroleum is the country’s largest industry, accounting for more than 20% of GDP, and around 47% of exports by value.
The economy is projected to grow by 2% this year and another 1.9% in 2020, according to the International Monetary Fund (IMF).