What are the perks and drawbacks of buying a new build in Norway?
Depending on where you are in the world, new build properties can have wildly different reputations. The Local spoke to industry experts to learn more about the upsides and downsides of opting for a newly built home in Norway.
After spending a longer period of time in Norway as a working adult, you will undoubtedly develop an interest in the country's property market.
You will then likely proceed to learn about the relevant regulations, financing options, and seasonal price and supply differences.
It won't be long before you stumble upon the age-old debate over buying new vs second-hand homes in the country.
In this article, we will focus on new homes - the associated advantages, the inevitable downsides, and the current market situation when it comes to new builds.
The Local has covered the essential vocab you'll need to embark on your home-hunting journey here, as well as written extensively about the important aspects of purchasing a property in Norway.
The benefits of buying a new build
Most experts agree that – while it comes with a hefty price tag attached – buying a new home in Norway also has notable benefits.
"One of the key benefits of buying a new property today is that the price is fixed, so you don't have to fight with other buyers in bidding rounds," Fredrik Søreide, the CEO of the real estate company Kaland&Partners, told The Local in a call.
"Furthermore, new properties are often finished in 1-2 years, so if you buy them now, they're already a good investment when you take them over and move in. If you look back 15 years, buying new properties in the biggest cities in Norway, such as Oslo and Bergen, has always been a good investment. I expect that to continue being the case in the years ahead," Søreide added.
His industry colleague, the CEO of the real estate firm Nordvik, Martin Kiligitto, told The Local that the fact that new homes are built in line with the latest building standards is a significant upside.
"The first and obvious point is that you get a completely new home that is well suited to your needs and desires. No painting or refurbishing is needed. New homes and houses are also built in line with the latest building standards, (which is) important in terms of lower heating costs due to good isolation, but also good ventilation and indoor climate.
"Secondly, we know that many do not want to start a refurbishing process but want to move right into their home. We also see the same for second-hand (homes); the better refurbished your home is, the better price you tend to get in the market.
"Also, new houses and apartments tend to be slightly lower in price, compared to second-hand, if you buy it in the early phase of the project," Kiligitto said, noting that, because of the increasing cost of building materials, the difference between new and second-hand has been close to zero in recent times.
And the downsides?
When it comes to the downsides of buying a new home, the two analysts point to two key concerns – waiting times and limited supply.
"First of all, you have to wait, that's a negative thing, usually 1-2 years before the construction is finished. Then the problem is also that there are few new apartments for sale these days; we've seen a decrease in the supply of roughly 50 percent because it has become expensive to build. Prices of building materials have risen notably because of the war in Ukraine. However, as we speak, material prices have started to go down, and, hopefully, they will continue to do so, so that we're back to normal prices in the months ahead," Søreide told The Local.
While Kiligitto agreed with the Kaland&Partners CEO on the downside of long waiting times, he noted that buyers in Norway shouldn't be afraid to invest in projects that are yet to be finalised.
"On the other hand, when buying a new house or apartment, you most often need to wait a few years before you can move in. But we also want to emphasise that buying a new home in Norway is safe, and you need not worry about the project not being finalised. Strict laws and regulations secure this," he pointed out.
He also noted that supply is currently strained, as "many builders have terminated projects the last six months due to increasing cost of building materials."
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After spending a longer period of time in Norway as a working adult, you will undoubtedly develop an interest in the country's property market.
You will then likely proceed to learn about the relevant regulations, financing options, and seasonal price and supply differences.
It won't be long before you stumble upon the age-old debate over buying new vs second-hand homes in the country.
In this article, we will focus on new homes - the associated advantages, the inevitable downsides, and the current market situation when it comes to new builds.
The Local has covered the essential vocab you'll need to embark on your home-hunting journey here, as well as written extensively about the important aspects of purchasing a property in Norway.
The benefits of buying a new build
Most experts agree that – while it comes with a hefty price tag attached – buying a new home in Norway also has notable benefits.
"One of the key benefits of buying a new property today is that the price is fixed, so you don't have to fight with other buyers in bidding rounds," Fredrik Søreide, the CEO of the real estate company Kaland&Partners, told The Local in a call.
"Furthermore, new properties are often finished in 1-2 years, so if you buy them now, they're already a good investment when you take them over and move in. If you look back 15 years, buying new properties in the biggest cities in Norway, such as Oslo and Bergen, has always been a good investment. I expect that to continue being the case in the years ahead," Søreide added.
His industry colleague, the CEO of the real estate firm Nordvik, Martin Kiligitto, told The Local that the fact that new homes are built in line with the latest building standards is a significant upside.
"The first and obvious point is that you get a completely new home that is well suited to your needs and desires. No painting or refurbishing is needed. New homes and houses are also built in line with the latest building standards, (which is) important in terms of lower heating costs due to good isolation, but also good ventilation and indoor climate.
"Secondly, we know that many do not want to start a refurbishing process but want to move right into their home. We also see the same for second-hand (homes); the better refurbished your home is, the better price you tend to get in the market.
"Also, new houses and apartments tend to be slightly lower in price, compared to second-hand, if you buy it in the early phase of the project," Kiligitto said, noting that, because of the increasing cost of building materials, the difference between new and second-hand has been close to zero in recent times.
And the downsides?
When it comes to the downsides of buying a new home, the two analysts point to two key concerns – waiting times and limited supply.
"First of all, you have to wait, that's a negative thing, usually 1-2 years before the construction is finished. Then the problem is also that there are few new apartments for sale these days; we've seen a decrease in the supply of roughly 50 percent because it has become expensive to build. Prices of building materials have risen notably because of the war in Ukraine. However, as we speak, material prices have started to go down, and, hopefully, they will continue to do so, so that we're back to normal prices in the months ahead," Søreide told The Local.
While Kiligitto agreed with the Kaland&Partners CEO on the downside of long waiting times, he noted that buyers in Norway shouldn't be afraid to invest in projects that are yet to be finalised.
"On the other hand, when buying a new house or apartment, you most often need to wait a few years before you can move in. But we also want to emphasise that buying a new home in Norway is safe, and you need not worry about the project not being finalised. Strict laws and regulations secure this," he pointed out.
He also noted that supply is currently strained, as "many builders have terminated projects the last six months due to increasing cost of building materials."
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