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PROPERTY

Record queues for student housing in Norway 

 Sharp rises in private rental prices mean a record number of students are queueing for student accommodation. 

Published: 12 July 2023 16:09 CEST
Pictured is student accommodation in Oslo.
A rise in rents mean there is more demand for student housing in Norway. Pictured is student accommodation in Oslo. Photo by Thomas Marthinsen on Unsplash

In just over a week, prospective students will find out whether or not they have been admitted into a Norwegian university. 

This means many are considering the prospect of staying at student halls and dormitories. Public broadcaster NRK reports record-long queues to get into student housing.

In Oslo, more than 7,000 students are waiting for student accommodation.  

“When students, in general, find it tighter and tighter financially, it is not surprising that students in Oslo struggle extra. Everything has become more expensive, especially rental housing,” Karl Magnus Nikolai Coronus Dretvik Nyeng, leader of the Norwegian Welfare Council in Oslo and Akershus, told public broadcaster NRK. 

READ MORE: How to get student housing in Norway as an international student

One reason for the increased demand is surging rents in the private sector. The Student Union in Oslo will raise its prices by 4.6 percent in August. Meanwhile, the cost of renting in Oslo has increased by 11.9 percent in the past year. 

“Now, when an apartment in Oslo is rented out for an average of 19,000 kroner a month and a studio well over 10,000 kroner, it is clear that it is cause for concern for the housing situation,” Jørgen Hellestveit, from the property section of the ad-listing site, Finn.no told NRK. 

Last week, the Norwegian Student Organisation (NSO) called on the government to introduce a rent cap. Something which the government has previously ruled out to The Local Norway. 

Finn, the country’s most popular website for ad listings, said that the number of homes available for rent in Oslo had decreased by around 10,000. 

“Now we see record traffic on the rental ads, and fewer people rent out. There will be fewer homes for students and other tenants, and there will be a lot of competition for those who are outside,” Hellsetveit said. 

This may mean that students spend far less time on their studies and more time trying to make ends meet, according to Nyeng. 

“The tighter and more expensive the housing market in Oslo becomes, the more students have to work even more alongside their studies,” he said. 

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PROPERTY

What first-time buyers in Norway need to know about the current property market

Norway’s property market has outpaced expectations this year. From what will happen to prices and whether the lending regulations will change, here’s what potential buyers need to know.

Published: 12 September 2024 13:55 CEST
What first-time buyers in Norway need to know about the current property market

By August 2024, the average cost of a home in Norway had risen to 4.75 million kroner. So far, house prices in Norway have risen by 8.3 percent.

However, thanks to wage rises this year, “real house prices” (which account for wage growth and other things) are at a similar level to 2017, interest organisation Real Estate Norway (Eiendom Norge) has said.

People are rushing to buy homes

Norway’s property market moves fast, but things have been especially fast-paced recently, according to estate agents.

In August 2024, it took an average of 42 days to sell a home. Furthermore, Real Estate Norway said that August saw more home sales than it had ever recorded in that month before.

Meanwhile, Martin Kiligitto, managing director at Nordvik Bolig, has told The Local that he expects the high activity to continue.

According to Carl O. Geving, the managing director of the Norwegian Association of Real Estate Agents (NEF), rising wages are one factor behind this trend. Salaries in Norway have started to rise following years of stagnation and high inflation.

READ MORE: House hunters in Norway rush to buy homes before price rises

The market is hotting up ahead of interest rate increases

Norway’s central bank brought the key policy rate to its peak at the end of last year, and cuts are expected to arrive in 2025.

Many who had been waiting on the sidelines to see whether rates would be raised further have now entered the market ahead of the cuts.

“Many potential buyers who have been waiting for a reduction in interest rates are now acting, likely driven by the expectation that prices will rise once the Central Bank of Norway announces a rate cut, which is anticipated in the first half of 2025,” Kiligitto said.

Prices are likely to continue rising over the next two years as mortgages become more affordable.

The second-hand market will be particularly tight

Norway hasn’t built enough houses to meet demand in recent years. Furthermore, increasing material costs and high interest rates have made new builds expensive.

These two factors have bottlenecked buyers into the second-hand home market.

“There is still a problem with the construction market and the sale of new homes. It is still expensive to build new homes, so there’s mainly heavy pressure on the market for used homes,” Geving told The Local recently.

He said the problem was biggest in Norway, where there was a large demand for small flats. Given how long it takes to build properties, this issue was likely to drag on for the foreseeable future. 

It appears as if lending rules will not change

In recent months, there has been speculation that Norway could loosen its lending regulations as the Finance Ministry was set to decide on new rules at the end of the year.

Among the predicted changes were tweaks to the equity required to buy a home. Currently, a minimum of 15 percent is required – although some banks ask for more from foreign customers.

The Financial Supervisory Authority of Norway, which supervises banks and other financial institutions, has appeared to scupper those hopes by saying that it would continue the current lending regulations in Norway.

This means that the deposit rate of 15 percent will continue, as will the borrowers being restricted to loans of five times their income minus any existing debts. Mortgage applicants will also have their finances tested against potential interest rate increases of three percentage points.

READ ALSO: What foreign residents in Norway need to know to get a mortgage

A lack of changes to the lending regulations has been criticised by Henning Lauridsen, the CEO of Eiendom Norge.

“Instead, the regulation has contributed to greater inequality in society and made vulnerable households even more vulnerable,” Lauridsen recently told business broadsheet Dagens Næringsliv (DN).

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