Housing Market Stalls as costs Outpace Income, Price Growth Expected in New Year
OSLO, Norway – New home and apartment construction is grinding to a halt across the country as costs exceed potential income for developers, industry experts warn. While interest rate cuts have offered some relief, they haven’t been enough to spur significant building activity, and a surge in construction isn’t anticipated without changes to building regulations. Despite the current standstill, analysts predict a rebound in price growth beginning in January, particularly in Stavanger, Bergen, and Tromsø.
The current situation stems from a basic economic imbalance: developers cannot absorb the costs of subsidizing home purchases. “The costs must be lower than the income,” stated Molvik, an industry analyst. “There will be no housing growth until technical requirements for buildings are relaxed so that costs are reduced.It’s probably not going to happen.” This lack of new construction,coupled with uncertainty in the resale market,is creating a challenging environment for both buyers and sellers.
Buyers are hesitant to purchase new builds while unsure of the value they’ll receive for their existing properties, further exacerbating the slowdown. Even recent interest rate cuts haven’t fully materialized into buyer confidence. “There have been interest rate cuts, but fewer than the buyers expected,” Molvik explained.
Looking ahead, the brokerage firm anticipates a price increase of five to six percent in 2026. Meier, a market analyst, noted an expected surge in activity from January, with a significant number of rental properties also expected to come onto the market in 2026. Currently, there is no bidding war for properties.
