● THE NORWEGIAN PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • SPRING 2022
THE NORWEGIAN PROPERTY MARKET THE RETURN OF INTERNATIONAL INVESTORS SPARKS RECORD HIGH VOLUMES Economic activity is expected to continue to increase in 2022, primarily driven by industries which were severally hit by restrictions in 2020 and 2021. GDP is expected to grow by 3.5% for the full year of 2022. Lack of qualified workers and supply chain issues might affect this growth. Norway is another Nordic country which noted a record year for the real estate market. In total 420 transactions were noted amounting to NOK 167 billion – making this a year for the history books. The last quarter alone amounted to NOK 76 billion which can be put in relation to e.g. 2013 when the total transaction volume for the entire year amounted to NOK 40 billion. Apart from being characterized by record high volumes, several M&A deals and large portfolio transactions could be observed on the market – amount-
ing to a total of 34 transactions above one billion NOK. International investors have also returned to the Norwegian real estate market after showing a limited presence in 2020. International investors amounted to 18% of the total transaction volume, where Swedish buyers were the dominant international buyer contributing to half of that volume. With a strong financing market and a favorable macroeconomic climate, Newsec expects the real estate market to continue to prosper in 2022 although the full year volume is forecast to be lower than in 2021 due to less M&A activity.
Contact: Øyvind Johan Dahl ojd@newsec.no
Photo: Shutterstock
The Norwegian economy has continued to grow and activity sharply increased while unemployment continued to fall in the second half of the year. Society is on its way to fully reopening and there is an optimism on the market. High energy prices have however caused inflation to surge. Excluding energy prices and taxes the inflation is roughly around the inflation target of 2%. Salary increases and larger price growth in imported goods is likely to push underlying inflation higher. Due to the high inflation the Norwegian central bank raised rates at the end of 2021 from 0.25 to 0.50%. The Norwegian central bank thus became the first central bank in the Nordics to raise interest rates. An additional three hikes are expected in 2022. As a result of the increase in interest rates, 5 and 10 year SWAPs are now at pre-pandemic levels.
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