Property Prices Are Set To Drop In Norway

13 Jan 2014

According to the real-estate broker association of Norway, for the first time since 2008, the Norwegian property prices are set to drop amid a growth in housing supply and as debtors face tougher requirements from lenders.

In 2014, a decline of 1% to 3% in prices has been forecasted by the association and follows the fall in prices that started taking place at the end of 2013.

Chief executive of real-estate broker association of Norway - EEF, Christian Vammersvold Dreyer said the growth in the property prices over of Norway in the past few years has been too steep.

Mr. Dreyer said that in recent years, the growth of housing price has been too strong compared with what they wanted, and now, the prices are starting to reach a reasonable and sustainable level.

The association said, in 2013, the average price growth dropped to 4.9% from 7.7% in 2012. In December, for the first time since 2009, the prices dropped compared to the year-earlier period.

As the economy of Norway sizzled, unemployment has decreased to among the world’s lowest rates and households have been restless to spend money.

The central bank of Norway, the Norges Bank, has forecast a soft landing for the housing market. The EFF also expects that in the long term, the housing market will keep strong due to basic factors like high immigration of foreign workers, decreasing construction activity from this year, very low unemployment at around 3.5% and solid rise in wages.