Norwegian house prices have grown rapidly since the beginning of 2020. Our most recent update suggests that Norwegian house prices were overvalued by 13 percent in 2021Q2 (see Figure 1). The gap has increased somewhat since 2021Q1. If house prices follow historical patterns, house price growth should dampen, so that the actual prices get closer to fundamental prices.
About the index
Housing Lab estimates fundamental house prices for Norway and compare them to the evolution of actual house prices. Fundamental house prices are determined by real per capita income, real after tax interest rates, and the housing stock per capita. Our estimates of fundamental prices are updated and published on a quarterly basis. Due to lags in the construction of the National Accounts data used to estimate fundamental prices, our estimates lag by one quarter. The underlying methodology is based on published research and is documented in Anundsen (2019).