Norway’s new home market off to its worst start in years

Norway’s new housing market is deepening into crisis. January sales dropped 31 percent year-on-year, while state housing loans ran dry within a single week.

Norway’s new housing market is sliding further into crisis. Sales of new homes in January fell 31 percent compared to January 2025, while housing starts are running 44 percent below calculated demand.

Despite a cautious uptick last autumn, the numbers are now moving in the wrong direction again.

– It is too early to conclude that the trend has shifted, but the start of 2026 will be tough regardless. Activity is low, profitability weak, bankruptcy figures in the supply chain high, and uncertainty around further interest rate cuts makes the situation extra unpredictable, says Lars Jacob Hiim, CEO of the Norwegian Home Builders’ Association.

The industry is calling for action. For eight months, the government has been reviewing 72 proposals from the industry and municipalities aimed at simplifying planning and building regulations.

– It is absolutely necessary that the proposals are followed up and that the government implements measures to reduce costs and accelerate housing construction, Hiim says.

The situation is further strained by a rapid depletion of state housing loans. Applications to Husbanken, Norway’s state housing bank, exceeded the entire 2025 loan allocation within the first week of January.

The association is also raising concerns about government plans to tighten criteria for housing quality loans, warning that stricter requirements will drive up costs and further weaken housing supply.