The Oslo housing market has barely moved for almost two years. Home prices are now slightly lower than they were in January 2025, but high interest rates and weak purchasing power are making it increasingly difficult for first-time buyers to take advantage of the slowdown.
Average home prices in the Norwegian capital have effectively remained flat since January 2025 and have actually fallen slightly, according to Eiendom Norge figures reported by Dagens Næringsliv.
Over the same period, consumer prices have risen by around 5.5%, meaning that Oslo homes have become significantly cheaper in real terms even though their nominal prices have changed little.
That marks a significant slowdown for a city where buying a home was for years associated with rapidly rising prices. But cheaper homes in real terms do not necessarily mean that they have become easier to afford.
First-time buyers are retreating from the Oslo housing market
The number of first-time buyers in Oslo fell by 10% in the first half of 2026, despite a record supply of small apartments, according to the Norwegian Association of Real Estate Agents (Norges Eiendomsmeglerforbund, NEF).
The association says financing has become the main barrier for younger buyers after years of high property prices and higher interest rates.
NEF CEO Carl O. Geving said the combination is particularly difficult in Oslo, where even relatively small properties require substantial loans.
“When first-time buyers retreat even though the supply of small apartments is high, it is a clear warning that purchasing power is not enough. High interest rates hit hardest where the need for capital is greatest. In Oslo, the threshold for buying your first home has become very high.”
The average home bought by a first-time buyer in Oslo has also become smaller, falling from 67 square metres in 2008 to 59 square metres in 2025.
The situation contrasts with Trondheim, where the number of first-time buyers increased by 4% in the first half of 2026. NEF points to lower property prices there, which reduce the amount buyers need to borrow and make high interest rates easier to absorb.
More small apartments have not solved the affordability problem
Oslo currently has an unusually large number of homes for sale. Part of that supply comes from landlords selling former rental properties, putting more small apartments onto the market.
These are precisely the kind of homes normally sought by younger and first-time buyers. But the additional supply has so far not been enough to overcome the financing barrier.
Even small apartments in Oslo remain expensive enough to require large mortgages. And interest rates remain high.
On 24 September, Norges Bank raised its policy rate from 4.25% to 4.50%, saying tighter monetary policy was needed to bring inflation back towards its 2% target. The central bank also said rates would probably need to remain elevated for some time.
For Oslo buyers, this means the housing market is being pulled in opposite directions: prices have stopped rising, while borrowing conditions remain restrictive.
Oslo is also seeing more people leave than arrive
Demographic pressure on the housing market has also weakened.
Statistics Norway figures show that Oslo recorded net migration of -879 people in 2025, meaning more people moved out of the city than moved in.
The capital still recorded more births than deaths, so negative migration does not by itself mean that Oslo’s population is shrinking. But population growth is much slower than during the peak years between 2008 and 2011.
The combination of slower population growth, high borrowing costs and a large number of homes for sale helps explain why Oslo’s housing market has behaved differently from several other Norwegian cities.
Analysts quoted by Dagens Næringsliv still expect prices to start rising again. Handelsbanken expects no price growth in Oslo in 2026, followed by increases of 3.6% in 2027 and 7% in 2028. SpareBank 1 analyst Daniel Rørvik also expects a recovery, but believes it could take longer.
For now, Oslo is in an unusual position. Homes are becoming cheaper in real terms and there are plenty of properties for sale, but fewer first-time buyers are entering the market.
