Norwegian residential property bubble starts to burst – report
Sales of new residential property have fallen 35% in Eastern Norway in the past two months compared to the same period last year, according to the latest sector update from Norwegian financial consultancy Samfunnsøkonomisk analyse.
The region includes a collection of counties as well as the capital Oslo, which together represent a major share of the country’s population.
According to Samfunnsøkonomisk analyse, the data found in its report ECON Nye boliger – which has been published since 2001 – has also pointed to weaker than expected prices during September – although they did continue to climb through the period covered by the data.
“The high supply of properties at the same time mean that the inventory of unsold properties is at a level equivalent to that during the start of the financial crisis,” the consultant said.
Western Norway, the area of the country that includes Bergen and Stavanger, shows an even weaker development; sales of new properties are down 36% over the same period.
Despite relatively low rates of inflation, low unemployment, and a high level of immigration by historical measures, buyers may be put off by the high levels that residential property prices have reached, the consultant said.
Annualised, property prices are up some 8.2% over the past 12 months in the Eastern Norway region, and they have continued to climb in the period covered by the latest report, despite the sharp fall in completed sales.