Sales of newly built homes in Norway declined in the first quarter of 2026, ending a brief recovery seen in March. The Norwegian Home Builders Association reported a 12% drop in transactions compared to the same period last year. The decline follows two consecutive quarters of stagnation, raising concerns among developers about future investments.
Real estate analysts attribute the slowdown to higher borrowing costs and stricter mortgage rules introduced in late 2025. Banks have raised interest rates three times since October, pushing monthly payments for new mortgages up by an average of 1,500 kroner. The Ministry of Finance confirmed these adjustments aimed to cool overheated housing prices but acknowledged the impact on first-time buyers.
A survey by E24 found that 68% of potential buyers postponed their plans due to affordability issues. The report also highlighted a 20% reduction in building permits issued in January and February, signaling caution among construction firms. Oslo and Bergen saw the sharpest declines, with sales dropping 18% and 15% respectively.
Industry representatives warn that without policy changes, the market could face further contraction. The Construction Industry Association called for subsidies to support young families and small developers. Meanwhile, the government has ruled out immediate intervention, citing long-term stability goals.
The central bank governor stated that while prices may stabilize, a quick rebound is unlikely. Analysts predict a 5-8% price correction by year-end if current trends persist.
Source: e24.no