The housing market in Norway has witnessed a dramatic downturn so far in 2023, with a nearly 50% decrease in the commencement of new housing compared to the same period in 2022, according to the Home Builders' Association. The Director, Lars Jacob Hiim, expresses concern that this trend could lead to a long-term housing crisis.

In April 2023, the sale of new homes was 35% lower than in April 2022, while the initiation of new housing had dropped by 41% compared to the same period the previous year. So far this year, 4563 housing units have been sold, which is 43% lower than the same period in 2022. The total number of new homes sold over the last twelve months is 15,960, a decrease of 36% compared to the previous twelve-month period.

Hiim notes that both the sale and initiation of homes fall far short of housing needs, which could result in a housing shortage, increased unemployment, and a loss of expertise in the industry. He is calling for measures to alleviate the situation, such as increased funding for the Housing Bank and an improved furlough scheme.

Home builders Obos and Selvaag also confirm the decline, with plans for significantly reduced construction this year. Selvaag Housing's administration points to high construction costs as a main reason that few new homes are entering the market.

Bård Folke Fredriksen, CEO of the Norwegian Cooperative Housing Association (NBBL), underscores the responsibility of municipalities in housing construction, pointing to an imbalance between supply and demand. He highlights Sandefjord and Kristiansand as good examples of municipalities that have succeeded in their housing policies.

The market for new holiday homes is also on a downturn, with 64% fewer sales of new holiday homes so far this year compared to the same period in 2022. Over the past twelve months, 59% fewer new holiday homes have been sold compared to the previous twelve-month period.

(Source: Home Builders' Association, Dagens Næringsliv)