Oslo banks have cut mortgage lending limits by several million Norwegian kroner in recent months. Real estate agents report that buyers now struggle to afford homes priced around 25 million kroner compared to those near 45 million kroner.
The central bank’s policy rate hike in December pushed average mortgage rates above 6%, up from 4.5% in summer 2023. This reduced maximum loan sizes for most borrowers by 10-15%, according to calculations from DNB and Nordea. A typical two-income household earning 1.2 million kroner annually can now borrow roughly 5 million kroner less than before the rate shock.
Estate agents in Oslo’s west end say demand has shifted toward higher-end properties priced above 40 million kroner. These buyers often use larger down payments or equity from previous sales, making them less sensitive to loan limits. Meanwhile, first-time buyers and families looking for mid-segment homes priced between 20-30 million kroner face tighter budgets.
‘The market has split in two,’ said Marit Lunde, broker at Eiendomshuset. ‘Buyers with 30% down payments can still compete for 45 million kroner homes, but those with 15% struggle to cross the 25 million threshold.’
Transaction data from Eiendom Norge shows sales of homes priced 20-30 million kroner fell 22% in the first quarter of 2024 compared to the same period last year. Sales of homes priced above 40 million kroner dropped only 8% in the same period.
Source: e24.no