Why properties in Norway’s big cities are expected to skyrocket in price

House prices are expected to grow by 37.4 percent in Stavanger, 36.3 percent in Oslo, and 35.7 percent in Bergen, according to a forecast by Samfunnsøkonomisk Analyse.

The forecast predicts that a house worth six million kroner in Oslo at the beginning of 2025 could become around two million kroner more expensive by the end of 2028.

Country wide house prices are expected to increase by 27.8 percent by 2028.

It’s not just the forecast from Samfunnsøkonomisk Analyse that predicts high increases in house prices. Norway’s central bank, Norges Bank, also estimated increases of 30.5 percent in the coming years. Meanwhile, Statistics Norway has forecasted a less steep rise of 19.2 percent between 2025 and 2028.

Andreas Benedictow, chief economist at Samfunnsøkonomisk Analyse, told the newspaper Dagens Næringlsiv that prices would rise in Oslo due to a lack of housing supply and low house building numbers.

Henning Lauridsen, the head of the interest organisation Real Estate Norway (Eiendom Norge), has previously warned that low house-building numbers had left Norway facing a crisis.

"With housing construction set to remain at record-low levels, we are now facing the full extent of the crisis," Lauridsen said recently.

The government has acknowledged the crisis, with Prime Minister Jonas Gahr Støre announcing an ambitious goal of building 130,000 new homes by 2030.

In regards to Bergen and Stavanger, the sharp increase on Norway’s west coast would be due to high activity in the petroleum industry, Benedictow said.

However, other factors would also affect prices.

“High wage growth, population growth and low housing construction, as well as lower interest rates, provide prospects for clear house price growth in the years to come,” Benedictow said.

Director Carl Geving of the Norwegian Real Estate Association (NEF) told Dagens Næringlsiv that new, lower, mortgage requirements would also play a part.

At the start of 2025, the deposit requirement was lowered from 15 percent to 10 percent, bringing mortgages into reach of more people.

This has boosted home prices as demand for properties has increased, Norway’s Consumer Council recently told The Local.

"Now that more people can borrow more money to buy a home, housing prices will rise further where there is high demand. We heard that banks and brokers noticed an immediate increase in demand after the change was announced.

"High house prices are a joy for those who are already in the market but are of little help to those who want to enter," Sollien Eriksrud, head of consumer economics at the Norwegian Consumer Council, said.

READ ALSO: The impact of Norway's new mortgage rules

Geving said the fact that Norges Bank recently decided against interest rate cuts could actually spell bad, rather than good, news for the country’s property market.

“Some might argue that since Norges Bank is still holding back on interest rate cuts, it is helping to keep second-hand prices in check. I am much more concerned that monetary policy will continue to stifle housing investment,” he said.