Rent prices in Norway's largest cities see 'historically strong rise'
The cost of renting in Norway has risen significantly over the first three months of 2023, the latest housing market figures show.
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The cost of renting in Norway's four largest cities rose by 4.4 percent in the first three months of 2023. In the last year, rental prices have risen by 10.4 per cent.
"Eiendom Norge's rental housing price statistics show a historically strong rise in rental housing prices in Norway both in the first quarter of 2023 and in the last year. We have never measured such strong growth in rental prices in Norway," managing director Henning Lauridsen of Real Estate Norway (Eiendom Norge) stated in a press release.
The price increase was most significant in Oslo, with a 5.3 percent increase in the first quarter. The price spike amounted to 4 percent in Bergen.
"The strong growth in rental prices we had through 2022 continues into 2023, and the capital, in particular, stands out. Through 2022, inflation changed pace both in Norway and internationally. This affects rental prices both through higher interest rates and, more generally speaking, increased costs for landlords," Lauridsen explained.
READ ALSO: Which cities in Norway have seen the steepest rent increases?
What's driving the increase in rental prices?
Many landlords have or are about to adjust their rents in line with the consumer price index (CPI) – a right they have by law. This can be done once every 12 months.
READ MORE: How much can my landlord legally increase my rent by in Norway?
The CPI tracks the development in consumer prices for goods and services purchased by private households in Norway and is used to measure inflation by national data agency Statistics Norway.
"The Rent Act gives the landlord the right to adjust the rent in line with the consumer price index every year, and it is likely that many will now adjust their rents. It is also a paradox that the consumer price index and rents can drive each other mutually because rents are included as a component in the consumer price index," Lauridsen explained.
Further price growth expected
Oslo has had the strongest rental price development over the past year, with an increase of 11.9 percent, followed by Stavanger and Sandnes with 7 percent and Trondheim with 6.3 percent. In Bergen, annual growth is currently more moderate at 2.6 percent.
"Rental prices have had a solid boost in Norway over the past year. While Oslo had a somewhat more moderate development during the pandemic, the capital is now leading the way in rental price development in Norway.
"We expect the growth in rental prices to continue because the higher interest rate has not yet been priced into the housing market. The relationship between house prices and rental prices will now find a new equilibrium," Lauridsen explained.
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The cost of renting in Norway's four largest cities rose by 4.4 percent in the first three months of 2023. In the last year, rental prices have risen by 10.4 per cent.
"Eiendom Norge's rental housing price statistics show a historically strong rise in rental housing prices in Norway both in the first quarter of 2023 and in the last year. We have never measured such strong growth in rental prices in Norway," managing director Henning Lauridsen of Real Estate Norway (Eiendom Norge) stated in a press release.
The price increase was most significant in Oslo, with a 5.3 percent increase in the first quarter. The price spike amounted to 4 percent in Bergen.
"The strong growth in rental prices we had through 2022 continues into 2023, and the capital, in particular, stands out. Through 2022, inflation changed pace both in Norway and internationally. This affects rental prices both through higher interest rates and, more generally speaking, increased costs for landlords," Lauridsen explained.
READ ALSO: Which cities in Norway have seen the steepest rent increases?
What's driving the increase in rental prices?
Many landlords have or are about to adjust their rents in line with the consumer price index (CPI) – a right they have by law. This can be done once every 12 months.
READ MORE: How much can my landlord legally increase my rent by in Norway?
The CPI tracks the development in consumer prices for goods and services purchased by private households in Norway and is used to measure inflation by national data agency Statistics Norway.
"The Rent Act gives the landlord the right to adjust the rent in line with the consumer price index every year, and it is likely that many will now adjust their rents. It is also a paradox that the consumer price index and rents can drive each other mutually because rents are included as a component in the consumer price index," Lauridsen explained.
Further price growth expected
Oslo has had the strongest rental price development over the past year, with an increase of 11.9 percent, followed by Stavanger and Sandnes with 7 percent and Trondheim with 6.3 percent. In Bergen, annual growth is currently more moderate at 2.6 percent.
"Rental prices have had a solid boost in Norway over the past year. While Oslo had a somewhat more moderate development during the pandemic, the capital is now leading the way in rental price development in Norway.
"We expect the growth in rental prices to continue because the higher interest rate has not yet been priced into the housing market. The relationship between house prices and rental prices will now find a new equilibrium," Lauridsen explained.
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