Nordics: City housing difficulties continue amid imbalances

Poor housing affordability is a long-term issue affecting the major cities across the Nordics. Residents of Stockholm, Helsinki, Oslo, and Copenhagen have consistently expressed dissatisfaction with the affordability of housing across their respective cities. However, more economic opportunities and a higher quality of life seem to be making up for it, as young professionals continue to move there.

What you will learn:

• After a post-Covid-19 surge in house prices and a subsequent correction in 2022–23, prices seem to have bottomed out and are once again rising in most Nordic cities. Across the medium term (2025–30), we expect Oslo and Stockholm to lead the way, with house prices growing at 6.0% and 4.8%, respectively, per annum.
• Strong economic and employment growth will provide solid demand-side fundamentals for house price growth, as more individuals are attracted to the cities and bid up both rental and house prices. At the same time, the number of new dwellings coming to market has fallen, acting as supply-side constraints and further pushing up house prices in the region. This undersupply of housing will likely persist in the short term too, as the recent period of high interest rates and elevated construction costs continues to weigh on the homebuilding sector.
• While strong house price and rental growth will favour homeowners and landlords, it risks pricing young professionals out of the housing market. In turn, these higher prices might affect the appeal of a city and undermine overall economic growth and productivity, thereby reducing business competitiveness and limiting the cities’ attractiveness to skilled workers. However, net migration data suggests we’re not at a tipping point just yet, and for residents these challenges are worth bearing for the benefits these cities provide.

For more insights into our Nordics outlook for 2026, tune into our webinar on 15 October.