Sticky new-home prices prolong sales and delay construction
New-home prices adjust more slowly than resale prices in Norway, finds Norges Bank Working Paper 8/2026, published October 15, 2026. Anna Emilie Iden, Plamen Nenov and Sonja Plaku link higher initial prices to slower sales, delayed starts and cancellations.
Higher prices, longer waits
In Oslo during 2005–2023, new homes averaged 9.5 months of supply versus 1.4 for existing homes, with standard deviations of 7.3 and 0.7 months respectively.
The new-versus-existing price growth gap has a standard deviation around 8 percent and correlates 0.54 with new-home months of supply.
New prices barely respond for about a year after negative resale-price innovations; a positive gap forecasts declining residential investment up to two years ahead.
At project level, a 10 percent higher initial price per square meter is associated with roughly 1.5 extra months to sell, 0.4 extra months before construction starts and around a 1 percentage point higher cancellation probability.
Norwegian developers generally post fixed prices, while resale homes use bidding.
Apartments resist the discount
ECON Nye boliger data cover projects with at least 15 units in 2002–2023; Norwegian Land Register transactions cover 2010–2021.
Apartments sold more than four years after completion command premiums above 5 percent; houses sold after at least 18 months show discounts of 10 percent or more.
In the model, rigid prices and demand shocks reproduce the joint price, sales and inventory patterns; flexible pricing and alternative shocks do not.
The authors discuss financing constraints and reputations for non-negotiability as possible explanations.
Construction bears the adjustment
The authors argue that weaker demand can reduce construction rather than new-home prices, prolonging supply fluctuations.
They identify a risk that monetary tightening raises medium-term housing costs through delayed supply effects.
These are research implications, not established causal policy effects or Norges Bank's views.
Source: Price Rigidities in the Market for New Homes
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