The housing prices have been rising every month in 2022. At the end of the quarter the prices are 7,2% higher than the beginning of the year. In Oslo the increase is a little bit lower with 6,9% increase in the same period.
There have been far too few houses on the market compared with the number of potential buyers.
The realtors are now telling that they have received many sales assignments lately and it is expected that there will be more homes for sale after the Easter holiday. That is good news for the buyers.
The big increase in already high house prices is not healthy in the long run.
Also, other prices are increasing in Norway and the inflation is increasing. Therefore the Central Bank of Norway has notified that the mortgage interest will increase 7 – seven times before the end of 2023. A rice of 0,25% has already been completed in March this year.
The interest rate is the most important factor when it comes to housing prices. It is therefore expected that the housing prices will flatten out throughout the spring.
There have been very low interest rates in Norway for many, many years. Many home buyers have not experienced increases in interest rates. Although the banks have been obliged to stress test their mortgage customers’ ability to manage an increase in the interest with 5%, it can be a challenge for some people to manage their housing costs. But experts believe that most people will manage this, they just have to reprioritize. Anyhow, a more moderate price development in housing prices will be a good thing.
From 1.1.22 a new regulation is being introduced in Norway. The seller, and the realtor, will be obliged to give more detailed information about the technical standard of the home in the sales material.
The seller may be responsible for incorrect and missing information to the buyers. He or she has this responsibility also today, but so far court decisions have only made the seller liable for damages if the damage or misinformation amounted to at least 5 percent of the value of the home. This is a lot of money, and therefore the seller has been imposed to give compensation to the buyer only in a few cases.
In the new law the limit for compensation is decreased down to NOK 10.000.
For this reason, the seller must be much more careful to give ALL the information about the property. He must , through the realtor, order a condition report from a technical expert or surveyor. The government has made a regulation of how this inspection must be implemented and the contents of the condition report.
The purpose is better protection of the buyer. This is a good thing in my opinion.
Be aware of the new rule about buyers’ duty to inspect !
As a home buyer you must be aware that the new law has a rule on the buyers’ duty to inspect before giving a bid. If you miss some information in the sales material or the technical report, or miss other information given on the viewing, you cannot complain after the bid has been accepted by the seller.
So, the duties goes both ways in the new law!
My concern as a home buying concultant is to protect the buyer. I am therefore prepared to help my customers to examine the new technical reports carefully and warn them about risk elements.
If you do not master Norwegian, I will warn you to buy a property without help to translate and interpret all the written material. This is and will still be,very complicated, even for Norwegians.
Because as I have told you before the bid is binding in Norway.
Are you an English speaker who are planning to buy a home in Norway in the near future? Then you might be interested to know about the situation on the housing market right now?
High activity and rising prices
This headline summaries the situation in short. In spite of higher unemployment rate and difficulties in many industries, people are buying new homes like never before. It seems that the very low interest rate on mortgages overrides the negative factors of the Corona crisis.This together with an even bigger focus on the home and living conditions has led to a record number of sales during this summer and autumn. People have maybe experienced the “home office life” and found out that they need another type or a bigger home?
Price development – updated 15.03.21
Before Corona most experts expected a moderate rise of the housing prices in Norway. This has not been the case and the prices are now 8% higher than 12 months ago in the country as a whole. In Oslo the price has increased with 15% the last 12 months and there are some worries that they will increase even more in the following months, up to a unhealthy level To keep up a healthy housing market it is important to have a balance between supply and the demand. This depends on, among other things, that enough newly built homes are put on the market.The supply of houses the market has been quite good so far. Despite that the prices have increased. Most people have kept their jobs during the crisis and the access of reasonable mortgages has been quite good .
The main reason why the prices have increased and the demand from buyers is so high is the low interest rate.
New regulation on requirements for residental mortgage loans.
The forecast for the coming years.
Even if the economy in general will have a weak development in Norway, the experts have changed their earlier forecast regarding the housing prices. They now believe that the prices will rice with 4% or more the coming years. Development in housing prices is very important for the Norwegian people. Around 80% own their own home in this country and most people use a big part of their income in housing expenses.
Read: Remember that the bid is binding when you buy a house in Norway
Need help or want to know more?
The self-owner philosophy and favourable tax benefits for primary housing are also a trigger for foreigners who come to Norway. As a home buying consultant I experience an increase in inquiries from this group. With some help with understanding the system and the language they end up as satisfied home owners. Do you have question about home buying in Norway, please do not hesitate to contact me.On my blog you can read more information in English and stories from some of my customers.
Trude Larsen T: +47 950 37 330
In my work as a home buying consultant I have experienced that people with foreign background often are unaware of the fact that the bid is binding when buying a property in Norway. They ask me to check the purchase contract after already giving a bid on the property.
That is actually too late in relation to the system for buying and selling homes in Norway:
Your bid is binding once the seller has accepted it. That means that you have to check both the sales material and the property before you give a bid. You have no regrets unless the seller have given you very wrong and defective information about the property. This is seldom the case because the real estate agent are helping the seller to give the correct information in the sales material. The purchase contract is merely an affirmation of what has been agreed through the bidding process.
Read about the penalties and risk for a walk-away buyer here.
I am not very surprised that people from other countries misunderstand this, because most other countries have some sort of right of withdrawal or system for checking the property after the bid has been accepted.
The Norwegian system gives the buyer a big responsibility, and you have to work very hard in advance of the bidding round to check the sales material and the property.
If you need help in connection with buying av property in Norway please contact me on e.mail:
Read: To buy a house in Norway from abroad.