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Norway Faces a Housing Crisis

Henning Lauridsen, CEO of Eiendom Norge, stated that the housing market crisis in Norway, long anticipated by experts, has arrived due to declining new home sales. In 2025, historically low construction levels are expected to exacerbate these trends, with housing prices potentially rising by 10%. A record price increase of 6.4% was already recorded in December 2024 compared to the same period in 2023, with monthly growth of 0.1% and a seasonally adjusted rise of 1%, according to Eiendom Norge. Previously, forecasts predicted a 4% increase. By early 2025, the average cost of a home in Norway reached 4,245,124 NOK (€362,600).
Lauridsen explained that while the figure may seem high, it remains moderate compared to the consumer price index after several years of declining real housing prices.
Secondary Market Sales Surge Amid New Construction Decline
December saw continued growth in secondary market sales, contrasting with the long-standing decline in demand for new builds in Norway. During the month, 3,755 homes were sold, a 23.3% increase compared to December 2023. The number of listings rose by 0.3% to 3,245. Throughout 2024, a total of 99,295 transactions were registered (+8.8%), with 107,283 properties listed for sale (+3.1%).
Lauridsen noted that volumes in the secondary housing market are at exceptionally high levels, comparable only to 2021 during the pandemic. In 2024, a record number of homes were listed for sale, even exceeding 2021 levels. However, the time required to sell a property increased significantly, averaging 54 days in November and 73 days in December. Homes in Stavanger and its surrounding areas sold the fastest, averaging 26 days, while Tromsø recorded the longest time to sell, at 109 days.
Regional Price Trends
In Western and Southwestern Norway, housing prices rose by over 10% in 2024. In regions such as Nordland, Trøndelag, Østfold, Vestfold, and Innlandet, the price growth was much more moderate. Lauridsen emphasized that the substantial growth in Western Norway reflects the expansion of export-oriented businesses.
2025 Outlook
According to Eiendom Norge, housing prices are projected to rise by 10% across Norway in 2025, with slightly higher growth anticipated in Oslo. A key factor driving this trend is the historically low level of new home construction. “The housing crisis, which we have long warned about due to declining new home sales, has already arrived,” Lauridsen stated. Officials and economists have underestimated the steep decline in housing investments during 2024 and the likely further reductions now.
Lauridsen urged policymakers to address issues related to construction costs and the lack of regulation in residential land development. “We don’t need stricter requirements from authorities; we need fewer requirements,” he emphasized. “Low-quality housing construction is a problem, and unfortunately, it will create further challenges in the labor market and exacerbate inequality.”
Economic Impact and Inflation
Changes in the economic environment may lead to the anticipated reduction in interest rates, as Norway’s core inflation slowed more than expected by the end of 2024. According to Statistics Norway, the consumer price index (CPI) rose by just 2.2% from December 2023 to December 2024, while the CPI adjusted for tax changes and excluding energy (CPI-ATE) increased by 2.7%. Economists surveyed by Bloomberg had forecast a 2.8% rise, in line with Norges Bank’s predictions.

Interest Rates and Housing Stimulus
Norges Bank is set to announce its next decision on interest rates on January 23, with expectations of monetary policy easing. Previously, borrowing costs were held at a 16-year high of 4.5%. Norges Bank Governor Ida Wolden Bache noted in late 2024 that the country was approaching a point where rate cuts could be considered. The operational goal remains a core inflation target of around 2%, which has now been achieved.
Lauridsen believes that lower interest rates will provide some stimulus, with the greatest impact in mid-sized cities and regions. However, he emphasized that the housing crisis will persist unless systemic issues in the construction and land regulation sectors are addressed.