Norway house prices rise for second month, defying central bank

Norway’s adjusted home prices rose for the second straight month, eluding the fallout from higher credit costs predicted by the Nordic country’s central bank.

Prices rose a seasonally-adjusted 0.7 per cent last month from January, after a similar gain a month earlier, according to data published by Real Estate Norway on Tuesday (Mar 5). Norges Bank expected a 0.2 per cent decline.

The data highlights the resilience of Norway’s residential property market to steeply higher borrowing costs – which the central bank has signalled won’t be eased before autumn. Adjusted home prices are now 0.5 per cent below their 2022 peak.

“We feel that there is optimism back in the housing market, and we see an increased demand for applications for financing certificates,” Randi Marjamaa, head of personal banking for Nordea Bank Abp in Norway, said in an email. More customers also end up buying a home, “as we had more signing meetings in February than what has been usual in the last six months.”

Even so, falling housing demand has hit the Nordic nation’s construction sector much like in neighbouring Sweden, with data in February showing new housing starts declining to their lowest level in at least 24 years. BLOOMBERG