SHARE
COPY LINK

PROPERTY

Why the cost of home renovations in Norway is rising

Norway can be one of the priciest countries in Europe to renovate, even if you do it yourself, and the cost of home improvements is rising due to the soaring prices of one crucial material.

Why the cost of home renovations in Norway is rising
Home improvement costs in Norway are rising. Photo by Brett Jordan on Unsplash

Home improvement projects in Norway can really leave a dent in your personal finances for a number of reasons.

To start, there’s the increased cost of labour due to high wages in Scandinavia. 

Then, certain rooms can only be worked on by professionals and must be completed to a specified standard, meaning you can’t do it yourself. Bathrooms, as an example, cost an eye-watering amount to have renovated: between 200,000-300,000 kroner, due to the requirement for them to be done to wet-room standard. 

Consumers in Norway are now feeling the pinch even more as the average price of timber has skyrocketed by 65 percent over the past year, according to Statistics Norway’s construction costs index

Several factors are driving the rising prices of timber. These include extensive bark beetle outbreaks in Canada and across Europe, which has led to a worldwide shortage of timber.

The shortage has been exasperated by increased demand in Norway and various knock-on effects of the coronavirus pandemic. 

“The reason for the price increase is first and foremost an imbalance between supply and demand and strong competition in international markets,” Heidi Finstad, administrative director of Treindustrien, which represents the wood and timber industry in Norway, told public broadcaster NRK

“The second part of the explanation is that the cost of running production has increased significantly during the pandemic. It involves personnel costs related to sick leave, transport costs,” Finstad added. 

But what has this meant for consumers? In short, this means that the rising prices of raw materials and increased operating costs during the Covid-19 pandemic have been passed on to them. 

“When the costs go up, it’s the customers who end up with the bill,” Tronde Lingjerde, who runs timber company Alltid Tjenster, explained to NRK. 

This has led to many delaying their home-improvement projects until a later date. 

“There are certainly people who have changed their minds and decided to wait with their projects until the prices go down,” Lingjerde said. 

So will prices go down once supply catches up to demand and the pandemic is gone? 

“When the situation normalises, we can expect prices to go down again a bit. Not necessarily to the level it was before, but at least with a bit more normalisation,” Thomas Iversen from the Consumer Council told NRK. 

EXPLAINED: What do Norway’s rising house prices mean for you?

“From our side, it seems as if price growth over the past year is due to extraordinary circumstances in the global timber market. It should stabilise when things return to normal,” he explained. 

Despite forecasting that prices would go down, Iversen said that those looking to make a few home improvements should budget for higher prices regardless. 

“Consumers who are going to build or refurbish should budget in the event that prices remain high in the future. You shouldn’t budget for lower prices,” he told NRK.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

Key mistakes to avoid when bidding on a house in Norway 

Norway's house bidding process is equally stressful and confusing, but before putting in an offer, you should make sure you aren't making any of these costly mistakes. 

Key mistakes to avoid when bidding on a house in Norway 

Buying a house is normally stressful enough, whether it’s getting a mortgage in place, going to dozens of viewings or spending hours going through listings. 

In Norway, the process is further complicated by the house bidding process, which you will have to go through when buying most properties today.

Additionally, you could make several mistakes that could make the process harder or cost you dearly. 

READ ALSO: 

Not having financing in place

Before you can bid on a property, you need to visit the bank to ensure financing for your purchase. If you are taking out a mortgage on the house, you will need to make sure you know the set limit the bank will allow to borrow. 

When you make a bid, the estate agent will contact the bank to ensure that you have the financial arrangements. If you do not have enough money or the mortgage your bank agreed on doesn’t cover the cost, your bid will be rebuffed. 

Therefore it is crucial to know your financial limits when entering bidding rounds to avoid any disappointments. 

Making a bid on a house you aren’t sure about

You should be absolutely sure that you could see yourself living in a property when you bid on it. This is because bids in Norway are legally binding, meaning that even if you put in a speculative bid and it’s accepted, you won’t be able to back out.

This means that you should avoid putting in any offers on homes you aren’t 100 percent sure about.

So while you may be in a rush to get on the property ladder or take a step up, patience will prevail over diving in headfirst. 

Forgetting to do proper research

The devil is always in the detail, and as dull as it may be, you should always read the small print to avoid any nasty shocks. 

This is especially important when buying apartments in Oslo and other cities where you will likely encounter housing associations where residents will be expected to pay various fees or contribute to the upkeep of the block. 

“For instance, if they are planning to replace the roof of the block the next year, you will read about it in the sales documents. It is important to consider whether you can afford a property also after potential add-ons,” Trine Dahl-Pettersen, real estate agent at Eindom 1, explained to The Local

Reading the small print isn’t the only place where research pays off. For example, one reader who has bought a house in Norway pointed out that finding a place that needs a little bit of work can help you avoid intense bidding wars, and locals tend to want a ready-made home to move into. 

“Finding a property that won’t go sky high over the asking price when bidding can be challenging. However, I quickly noticed that Norwegians are not afraid to bid high for a ready-to-go home,” Scott told The Local of his experiences buying in Bergen. 

“If you are comfortable doing some work on it, you can find a much better deal, maybe even under the asking price,” he added.

Therefore, market research can help prevent you from paying over the odds. 

Making more than one bid at a time

Unfortunately, putting plenty of bids out and seeing which offers stick could be a lot more disastrous than you may think. 

As mentioned earlier, bids in Norway are legally binding. Meaning that if you have two bids accepted at the same time, you will be legally obligated to purchase both of them.

Not having BankID

Despite the bidding process being done over the phone, there are still some hoops to jump through. 

You’ll need to have a Norwegian Bank ID available for the bidding process, as it is needed to confirm your identity when sending your bids. 

Without this, you won’t be able to lodge any offers. 

In addition to bank ID, you will need a Norwegian identification number (D-number/Personnummer) to hand. 

SHOW COMMENTS