Why a fall in second home ownership means a tougher time for tenants in Norway

Frazer Norwell
Frazer Norwell - [email protected] • 3 Jan, 2023 Updated Tue 3 Jan 2023 16:20 CEST
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Rent prices in Norway will likely increase for a few reasons. Pictured are apartments in Oslo. Photo by Marius Niveri on Unsplash

Throughout 2023, it is expected that the number of second homes will continue to fall. This and increased demand for rental properties spells bad news for tenants.

Next year will likely see increased demand for rental properties in Norway's property market, according to industry experts.

Henning Lauridsen, CEO of Real Estate Norway, told the public broadcaster that NRK that a growing population and increased immigration would lead to higher demand in the rental market than has been seen in recent years.

"It will be able to generate a large demand for housing, first in the rental market. Eventually, this will spill over into the owner-occupied and housing markets," he told public broadcaster NRK.

Unfortunately, increased demand isn't the only thing that will mean rents in Norway will increase next year.

In addition, the number of second homes, which are typically offered out for rent by landlords, has fallen, meaning there are fewer available properties on the market.

The combination of both less housing and increased demand would squeeze rents upwards.

"As a result of expected labour immigration and more refugees from Ukraine, we expect increased demand in the rental market in 2023. When the number of secondary homes continues to fall, the under-coverage of rental homes in Oslo will become increasingly critical. In light of the development, we expect rental prices to be pushed up," CEO of the Norwegian Real Estate Asscoation Carl O.Geiving said.

The Norwegian Real Estate Agent's Association said that increased property tax and rising interest rates were behind the significant drop in second homes being available on the rental market.

"Increased property tax on secondary homes, rising interest rates and expectations of relatively moderate house price growth going forward have contributed to the decline," Geiving explained.

Tight equity rules when it comes to purchasing a second home in Oslo have also had an effect on the number of homes available for rent in the capital.

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Frazer Norwell 2023/01/03 16:20

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