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Low number of rental properties available in Norway despite huge demand

Despite massive demand for rental properties, the number of homes on the market in Norway is down significantly compared to last year, recent figures show. 

Pictured is apartments in Aker Brygge in Oslo.
The number of properties for rent in Norway is lower than a year ago. Pictured are apartments in Aker Brygge in Oslo.Photo by Denis Volkov on Unsplash

At the end of June this year, there were 45 percent fewer rental properties on the market compared to the year before, financial newspaper Finansavisen reports. 

“It is a demanding time for those entering the rental market right now. There are simply too few homes on the market,” Jørgen Hellestveit, marketplace director at Finn Eiendom, told Finansavisen.

In Oslo, there are around 40 percent less properties available compared to June last year. Additionally, while there are 30 percent fewer ads for rental properties, Finn, the country’s most popular website for finding property, saw record traffic for listings in July. 

Despite the more limited selection, rental homes are also being snapped up much quicker than last year. Last year, a home was listed for 13, 13 and 12 days in May, June and July before a lease was signed. In the same months this year, properties lasted 10, 8 and 11 days on the market before a tenant was found, according to Finn.no. 

READ ALSO: Eight things to know when renting an apartment in Norway

Property expert Baard Schumann told Finansavisen that those trying to rent are getting a raw deal. 

“The losers (in the property market) are those who come to the city and have to rent. They are not allowed to borrow because of the mortgage regulations and increased interest rates. The first-time tenants really lose, and they don’t get to save either because they have to pay so much in rent,” Schumann said. 

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Property latest: What’s the outlook for Norway’s housing market this Autumn?

As is the case in most of Europe, Norway's housing market is currently characterized by a lot of uncertainty. However, housing prices in the country are expected to fall this Autumn due to – among other things - cyclical patterns and the effect of rising interest rates.

Property latest: What's the outlook for Norway's housing market this Autumn?

After a year of rising housing prices in Norway, the market is starting to cool off a little. According to the latest Real Estate Norway data, house prices fell by 2.2 percent in September. Adjusted for seasonal variations, prices fell by 0.6 percent.

However, it is important not to overstate the decrease, as home prices in Norway are cyclical – they’re traditionally lower in the Autumn and Winter.

While the COVID-19 pandemic has left a mark on the real estate market, most experts still agree that falling prices should be the norm in October, November, and December.

This Autumn, price developments will also be characterized by a considerable level of uncertainty as the energy, security, and inflation crises continue to grip Norway, Scandinavia, and the Old Continent.

Housing market snapshot

Wondering how many homes are sold or how many homes are put for sale on the market each month? Curious about the average price and sale time for a home in Norway at the moment?

We’ve got you covered.

In September, 9,798 homes were sold in Norway, a 5.6 percent decrease compared to the corresponding month in 2021. At the same time, 11,716 homes were listed for sale, which is 17.3 percent more than in September 2021.

Furthermore, it took an average of 29 days to sell a home last month, according to Real Estate Norway.

The September statistics show that the number of properties on the market has registered a robust increase, while home sales have leveled off.

This points to a potentially lower home price trend in the months ahead.

Interest rate hikes

The fact that price developments in September were relatively weak in virtually all parts of the country – with the exception of Ålesund and the surrounding area – could indicate that the Central Bank’s (Norges Bank) interest rate hikes are beginning to work.

There are also other signals that Norway’s economy has started taking note of the monetary tools at Norges Bank’s disposal and broader crisis-related factors.

In its Tuesday forecast, the Confederation of Norwegian Enterprise (NHO) announced that unemployment in Norway is set to increase in the months ahead as the economy continues to be affected by a shortage of goods, raw materials, and energy.

As activity levels in the Norwegian economy decline, growth in the workforce will likely level off.

The Norwegian economy is booming at the moment, but should this development reverse, it would also likely negatively affect housing prices in the short term.

Change expected in January

If prices continue to follow seasonal trends, expect to see them rise again from January due to the lack of properties on the market and as buyer interest starts growing.

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