Market Update December

Greater predictability from the Norwegian Central Bank

Kristian Ellertsen
min read
"We do not expect the need for further interest rate hikes," said Central Bank Governor Ida Wolden Bache regarding the future direction of the interest rate policy.
Holiday Home Market: The weakest in years

2023 marks the weakest year in the Norwegian holiday home market since 2001, characterized by tightened interest rate policies and economic factors affecting both buyers and sellers. In the past decade, there has never been less than 11,000 vacation homes sold per year, with a significant surge during the pandemic to 16,700 sold cabins in 2021. However, for 2023, the number of vacation homes sold is expected to be less than 9,000. The turnover of vacation homes in the open market declined by 17 percent in the third quarter of 2023 compared to the same period in 2022. In particular, the construction of new cabins has experienced a significant reduction in 2023. Due to uncertainty related to a weak Norwegian krone, high interest rates, and inflation, many families have put on hold their dreams of cabin ownership in anticipation of greater economic predictability.

Interest Rate Policy and Forecasts

Swedbank's earlier predictions of an interest rate hike in December came to fruition. At the Norwegian Central Bank's policy meeting on December 14th, the interest rate was raised by another 0.25 percentage points to 4.50 percent. This decision goes against the recommendations of organizations such as LO, but is justified by the fact that price growth remains too high. This reflects the uncertain economic situation in Norway, where the Norwegian Central Bank is trying to balance inflation and economic growth.

"We see that the economy is cooling down, but price growth is still too high. An increase in interest rates now reduces the risk of prolonged high price growth. We will probably keep the policy rate at 4.5 percent for quite some time," said Central Bank Governor Ida Wolden Bache.

The Norwegian Central Bank indicates that the policy rate will remain at 4.5 percent until the fall of next year, before gradually decreasing with further interest rate cuts. Central Bank Governor Ida Wolden Bache sent clear signals that they expect the peak in interest rates has now been reached, and she stated that they do not anticipate the need for further interest rate hikes. For many families, the cost of living is high, but it is reassuring that the interest rate is expected to decrease.

Holiday homes still left empty

Holiday homes that are empty for the majority of the year have become a significant societal issue, particularly in terms of environmental and economic impacts. According to researcher Tor Arnesen at Østlandsforskning, less than 10 percent of vacation homeowners have indicated that they are willing to rent out their cabins. NRK reports that German cabin owners have taken a different approach by renting out their vacation homes for up to 200 days a year. In Norway, there have been political proposals to require new cabin developments to include a clause mandating 30-40 percent rental occupancy. While environmental organizations support such measures, there is a growing perception, including from &Hamlet, that rental mandates may not necessarily be an efficient solution. It is easy to circumvent such rules, and a better approach may be shared ownership.

Shared ownership as a solution

Shared ownership of holiday homes has become increasingly popular as an alternative to full ownership for those who wish to fulfill their cabin dreams. Shared ownership allows buyers to share costs and responsibilities with others while enjoying the benefits of a larger and better-equipped holiday home than they might otherwise afford. &Hamlet is an example of a platform that facilitates shared ownership and believes that this is a more profitable and sustainable way to fulfill the dream of owning a holiday home.


The holiday home market in Norway is evolving, influenced by interest rate policies, economic and environmental factors, and questions related to rentals. The dream of cabin life remains strong among Norwegians, with over 100,000 constantly considering purchasing a holiday home. It is important for both buyers and sellers to be aware of these changes and consider alternatives that can make ownership more accessible and cost-effective. Shared ownership is a solution that more and more people see as the best way to achieve the dream of a holiday home while maintaining financial flexibility and responsibility.

As we move into 2024, we will continue to monitor how the market develops and share regular updates. Please feel free to contact us if you have any questions or would like to take a closer look at a specific holiday home.

Kristian Ellertsen
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