Norway Real Estate Market Outlook 2025

New upcycle starting in 2025

Following more than two years of challenging economic conditions, Norway's economy is set to recover in 2025, supported by stabilizing interest rates, rising real disposable incomes, and easing inflation.

In addition to the improving economic outlook, the financing market is beginning to show signs of recovery, which is an important factor for the wider real estate investment recovery. 

We are at the turning point of the economic cycle, and the sentiment in the investor market is once again becoming optimistic, which is expected to increase activity in the Norwegian real estate market in 2025.

Economy

The Norwegian economy has experienced moderate growth since mid-2022, influenced by successive interest rate increases, high inflation rates, and subdued international demand, which have collectively hindered economic activity. The Norwegian economy grew by 3.2% year-over-year in 2024, 0.9% for the mainland economy; while inflation continued to cool down to 2.2% in 2024. 

Capital Markets

The Norwegian prime real estate investment market recovered somewhat in 2024, with secondary and tertiary markets lagging. However, there is still a large distance between buyers and sellers outside of prime markets. The market for Core assets at or around prime yield will continue to be dominated by equity buyers as debt market improvements are lagging behind other countries. 

Office

Norwegian prime office investment saw a strong rebound in 2024. Prime rents have flattened and have not increased since 2Q 2025. 

Industrial & Logistics

Leasing activity for newbuilds improved during the second half of 2024, and we expect these tailwinds to continue in 2025. 
Vacancy rates on existing properties will still see some upward pressure from very low levels.

Retail

Falling interest rates and improving real incomes are expected to boost retail sales and consumer spending in 2025. Retail investment will focus on necessity-driven assets, such as grocery and hard discount-anchored retail parks and big boxes.

Hotels

The outlook for the Norwegian hotel sector is positive, with higher transaction activity expected in 2025. Continued strong hotel performance, particularly in Tromsø and Bergen, is expected. Strong international demand is projected to sustain positive RevPAR growth through 2025.

Data Centres

Lack of availability in primary markets and expectation of power availability are causing the demand for new data centre capacity to expand into Norway and other smaller markets. Norway is a suitable and attractive secondary market for new data centre investment because of its low cost of electricity, good availability of power and land, strong governmental support and high supply of available renewable energy.

Sustainability

Owners and occupiers of commercial real estate will face significant challenges when trying to navigate the complex regulatory landscape, as new directives come into effect. Assets with good sustainability credentials are likely to experience enhanced cash flow stability and greater yield compression.