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PROPERTY

Rent prices in Norway in steep rise during second quarter

Rental prices in Norway's four largest cities rose in the second quarter of this year, with prices up 4.2 percent overall from last year, figures from Real Estate Norway show. 

Pictured is a block of flats in Oslo.
Real Estate Norway said it saw a historically high increase in rental prices in the second quarter. Pictured is a block of flats in Oslo. Photo by Emilia Samborska on Unsplash

A sharp rise in the cost of renting in Norway was recorded in the second quarter of 2022, the latest figures from Real Estate Norway (Eiendom Norge) show. 

“Eiendom Norge’s rental housing price statistics show that there was a historically strong rise in rental housing prices in Norway in the second quarter of 2022. Stavanger and Sandnes had the strongest growth with an increase of 5.2 per cent, followed by Oslo with 3.2 per cent and Trondheim with 2.5 per cent,” Managing Director of Eiendom Norge, Henning Lauridsen, said. 

However, the cost of renting in Bergen dropped 3.1 percent in the second quarter. Despite this, rental prices had increased sharply in Bergen and the west of Norway in general overall in the past year. 

During the last 12 months, Stavanger/Sandnes and Bergen had the largest rental price increases with rises of 10.3 and 6.6 percent. Trondheim had the third largest growth with 4.6 percent, followed by Oslo with 3.6 percent. 

“We link the strong growth in rental prices in west and south-west Norway to strong growth in the Norwegian economy as a result of increased activity in the oil industry in this region. In the student city of Bergen, prices are probably also driven up because the pandemic is over and the infection control measures have been lifted,” Lauridsen explained. 

Another thing reported by Real Estate Norway was a low supply of rental homes in Norway. 

“We have never previously registered such a low supply of homes for rent on Finn.no. While the supply is relatively stable in Bergen and Trondheim, the supply has decreased a lot in Stavanger/Sandnes and Oslo. In Oslo, the supply is at a disturbingly low level, which has matched up with reports in Media,” the managing director said. 

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 reported last week. 

“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.

Despite the more limited selection, rental homes are also being snapped up much quicker than last year. Last year, a home was listed on the market 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, eight and 11 days on the market before a tenant was found, according to Finn.no. 

READ MORE: Low number of rental properties available in Norway despite huge demand

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PROPERTY

The hidden extra costs when buying property in Norway

Buying a home in Norway comes with a few more costs than the list price. Here are some additional outlays you should consider before purchasing a Norwegian house or apartment. 

The hidden extra costs when buying property in Norway

Purchasing a house or apartment is usually the highest value purchase one can make in life. However, with such large figures involved when buying a house, it is easy to overlook some of the more hidden but still pricey costs that you’ll have to cover to make a house your home. 

Below, we’ve listed the most important you need to know about. Some of the costs you’ll need to pay every month when you purchase a home, others can put a serious dent in your budget- or jeopardise the purchase if you overlook them. 

Fellesgjeld

Many homes in Norway, especially apartments in Oslo, belong to a housing association or borettslag. A housing association in Norway is a legal entity similar to a company or business, where buyers purchase a share and get the exclusive right to live in a property within a block. 

That’s because you buy into the housing association rather than the property itself. But, much like a company, housing associations also have overheads and debts. 

Fellesgjeld is the shared or collective debt of the association. The joint debt includes original building costs and renovation works, such as a new roof that have taken place. The instalments and interests are paid monthly. So when buying into a housing association, you will need to consider the joint debt payments as part of the price. 

READ MORE: The key things you need to know about Norwegian housing associations

Felleskostnader

Felleskostnader is the shared monthly repayments on the collective debt that residents of housing associations pay. However, there are a number of other costs included in these monthly repayments, such as municipal fees, porter services, cleaning communal areas and building insurance. 

One more thing to note is that you will need to pay municipal fees wherever you decide to call home. 

Renovation costs 

Fixer-uppers may seem like the best way to grab a bargain, but beware, renovating certain rooms in Norwegian homes can cost an absolute fortune. 

Bathrooms and kitchens in Norway need to have the work signed off by the municipality and be completed by a qualified tradesman- this means you’ll likely need to get the professionals in. 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. 

Dokumentavgift

This is a not-so-hidden cost as plenty of countries have stamp duty. When you buy a freehold property (one that isn’t part of a housing association), you will need to pay 2.5 percent of the purchase price to the state. However, homes in housing associations are exempt from this.  

Banks rarely offer additional financing for stamp duty, so it’s worth taking this cost into account when purchasing the home. For example, a house with a sale price of four million kroner will cost 100,000 kroner in stamp duty- so always save a little bit of budget left over to cover this cost. 

Tinglysingsgebyr

You will also need to pay a land registration fee when purchasing a property. When submitting this online, it will cost 540 kroner. If you prefer not to do things digitally, then you can expect to pay 585 kroner to file the paper form. 

The fee for buying into a housing association is slightly cheaper. Following the land registration, you will need to pay the stamp duty. 

Getting drawn into a bidding war

Plenty of homes in Norway have an asking price where bids will begin rather than a set cost. 

When buying a home, the true cost will likely be significantly above the asking price. 

Getting drawn into a bidding war can increase the price of a house significantly. 

Bids in Norway are more or less legally binding. If you bid outside your means, you could find yourself in trouble. 

To avoid getting pulled into a bidding war, you should consider purchasing a new build- which are sold for a set fee. 

READ ALSO: Six key tips to survive the bidding war when buying a house in Norway

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