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Property in Norway: What to expect if you're buying a home in Oslo

Agnes Erickson
Agnes Erickson - [email protected]
Property in Norway: What to expect if you're buying a home in Oslo
Photo by Siarhei Plashchynski on Unsplash

Here’s what you need to know before purchasing property in Norway’s capital city Oslo.

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Oslo is a popular city in Norway for foreigners with plenty of job opportunities, a lively cultural scene, and Nordic charm. This international hub is also known for its sky high real estate prices. Yes, you have to pay, but many believe buying in Oslo is a safe investment in a great place to live.

Why buy?

In this bustling city that is surrounded by nature, buying over renting is strongly favoured. This has a lot to do with the tax rules around housing. To begin with, there is no housing tax. Tax on the benefit of living in one's own home was removed in 2005.

There is also an interest deduction rate of 22 percent. So if you pay 10,000 kroner on your mortgage every month to the bank, you will receive 2,200 kroner back from the state. Note that you must be the one living in your home in order to receive tax incentives. If you rent it out to tenants then you will not receive money back from the state. 

Even if you don’t see Oslo as being your home forever, statistics show that buying  property in the capital city is a pretty safe investment, that's because house prices in Oslo have been steadily increasing the past 15 years. 

And the growth doesn’t seem to be slowing down.

The Norwegian Real Estate Association's CEO Carl Geving told Nordre Aker: “Price rises in Oslo will continue due to low interest rates and low housing construction.”

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Possible hurdles 

Oslo sees close to 20,000 house sales per year. That's more than the sales of fellow big cities Bergen, Stavanger, and Trondheim combined.   

And yet, the supply still hasn’t quite met the demand.

Real estate agent Anders Nykkelmo Solem believes the hardest part about buying property in Oslo is the small number of homes available on the market.

"There is very little to choose from, nor does it seem to show an increase anytime soon," he told The Local.

If you're looking for a house, then it may be even more difficult to find one in your price range. Oslo currently has 697,010 inhabitants and over a third of them are living in apartments. There seems to be budding new residential real estate development everywhere you turn in the capital city and most of them are apartment buildings. As of recently, there were 27,184 single family homes in Oslo and 248,276 apartments. 

Recently an 11 square-meter “micro-apartment” in Oslo’s city centre was put on sale for a whopping 2.4 million kroner (€240,000 or $280,000) that's 219,000 kroner per square metre or €21,000 or $25,868.

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It can also be hard to get into the real estate market if you have a lower budget.

First time buyer and student Anders Ramvik said: “I chose to buy in Drammen, a neighbouring city of Oslo. It was impossible to get anything I wanted in Oslo with the prices being so extreme.” 

Where can I get the most for my price range?

If there is no wiggle room to choose a more affordable neighbouring town outside Oslo and you really want to be in the capital, then you should look to the east of the capital.

“In the districts Gamlebyen, nye Gamlebyen, Tøyen and Ensjø you get more property options for your money, compared to other neighbourhoods in Oslo," says real estate agent Nykkelmo Solem.

"In addition, public transport, services and everything else are absolutely on the same level as the other side of the city."

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The process of buying

Start by making a list of what your “must haves” are. And know your budget or bidding limit (because there is often a bidding round).  Familiarise yourself with the different districts and what they have to offer. It would also be smart to check how much homes have recently sold for in your desired areas. 

You will likely need a loan so it's time to head to the bank. Do this in the early stages before you get your hopes up or waste any time looking in the wrong price range.

The Sørenga project in Oslo, A part of the big Fjord City urbanisation project. Photo: Kurt:S/Flickr

You can start going to shows either before or after receiving your loan estimate from your bank. Check Finn.no for a list of what is currently on sale. Realtors often have two rounds for listings to be viewed by the public which are typically only open for a few hours at a time.

The salgsreport or the “sales report” of the listings information is handed out at the showing as well as found online with the listing. Take your time and read through this carefully if you are seriously considering making a bid. It is in this sales report you will find important information such as what needs to be fixed and what has recently been upgraded. Keep in mind that issues with the bathroom, electrical installations, drainage, roofing and plumbing are all costly to fix and should be factored into your budget. 

There is also a rating system to become familiar with in the report -TG:0, TG:1, TG:2 or TG:3. These ratings show the degree of condition parts of the house are in. TG:0 means the listed appliance, item, or area is in excellent condition, while TG:3 applies to something that is completely dysfunctional and ready to collapse. 

If you have any questions before bidding and can’t find the information either in the  sales report or in the listing online, then contact the listing agent for a follow up. 

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If you want to make a bid

The bidding rounds for property in Oslo typically take place the day after the last showing. You can bid through text or telephone via communication with the property’s owner or realtor. There is often a time limit on how long you are able to place bids which should be stated before the process begins. If you win the bidding round (or you were the only bidder) then the property is yours.

It is standard in Norway to be already moved into your new home within a few months of your bid’s acceptance. 

If you want to own a second property in Oslo

Buying a second home in Oslo comes with a different set of rules. Typically for a first property purchase, banks require you to have around 15 percent of the loan you receive already in saved capital. But if you’re looking to take out a second mortgage for a second home, there is a demand that you must have at least 40 percent of the loan amount already in the bank. This is aimed at preventing the rich from scooping up multiple properties thus making it even more difficult for first time buyers to enter the real estate market in Oslo. 

How has Covid-19 affected real estate in Oslo?

The pandemic has certainly impacted the property market in the Norway, but much less so in Oslo. Last year Oslo saw a dramatic 12 percent increase in residential housing prices. The city also broke records for prices per square meter.

In 2020 the average price per square meter for apartments in Oslo was 83,181 kroner.

During the ongoing Covid-19 crisis, showings for apartments and houses have had to change. Perspective buyers are often limited to 15 minutes per showing and there are a restricted amount of viewers allowed in a property at a time. You can request a private showing, although there is no guarantee you will get one. 

But locals don’t seem to be bothered by the extra stress it may add to their home buying process. 

"It is fine. Everyone understands this, and both we brokers and home buyers greatly appreciate that we can keep the wheels in the housing market going," says Nykkelmo Solem.

Useful vocabulary 

  • Eiendom - Property
  • Pris - Price
  • Kjøp - Buy 
  • Visninger - Showings 
  • Budrunde - Bidding round 

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