Norwegian residential property nosedives
Property prices in Norway reversed in May, reversing a multi-year trend according to data from industry body Real Estate Norway (Eindom Norge) – and constituting the biggest month-on-month fall from April to May in 14 years.
Prices in the capital Oslo fell on average by 1.4%. This follows a 12-month gain of 12.1% denominated in NOK, and a 40% gain over the past decade; now expectations are that prices could moderate going forward. Prices nationally fell by 1.1% over the month.
“Stavanger now has the strongest prices, and so far this year has experienced [faster rising prices] than cities such as Bergen and Trondheim. The change in the Oslo trend is materialising as a price fall, something that is likely to continue for some months yet. This, after an abnormally strong growth period of some 40% the past 10 years, is neither surprising or dramatic,” said Christian Vammervold Dreyer, CEO of Eindom Norge.
“Dampened prices are a desirable development. The Norwegian economy continues to improve, and with falling unemployment, lower rates and growth in the population, there are reasons to be optimistic about the property market. It is equally important to follow developments closely, because on the part of the Norwegian economy, it is not desirable to have a too strong correction,” Dreyer added.