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PROPERTY

EXPLAINED: What do Norway’s rising house prices mean for you?

Even a pandemic hasn't been able to stop property prices from soaring in Norway over the past year, but why are they rising, and how long will they continue to rise for? Here's what you need to know.

Published: 9 July 2021 15:54 CEST
EXPLAINED: What do Norway's rising house prices mean for you?
Will prices continue to rise going forward or will they plummet? Photo: Seth kane on Unsplash

Property prices in Norway have risen 12.5 percent nationally compared to the same time last year, according to new figures from Statistics Norway. 

In addition to this, prices rose 2.7 percent from the first to the second quarter of 2021, with values increasing in every county in Norway. 

The average price of a property in Norway in June was just shy of 4.4 million kroner (approximately $505,000) according to numbers from Real Estate Norway, the national association for estate agents in the country.

PROPERTY IN NORWAY: What to expect if you’re buying a home in Oslo

Where have house prices been rising? 

Compared to last year, house prices have grown strongly across the board. The most robust growth was in Vestfold, Telemark and Viken, where prices rose by 15 percent. The slowest growth was in Møre and Romsdal and Vestland if you exclude house price rises in Bergen; houses still rose by just under ten percent in those areas. 

Detached and semi-detached houses grew in value the most while prices for apartment blocks grew the slowest. 

What’s causing house prices to rise?  

The rise in housing prices has primarily been driven by low interest rates.

Norges Bank, Norway’s central bank, slashed interest rates to zero last in May last year due to the coronavirus pandemic. 

“Most of the price increases over the past year can be attributed to the interest rate effect,” Røed Larsen from Housing Lab, a property think-tank, told online news site Nettavisen. 

Lower interest rates mean more people are willing to borrow money to make big purchases such as houses, leading to a massive surge in demand across Norway. 

Houses are selling in record amounts and the average time a house spends on the market in Norway before being bought is just 29 days as of June 2021.  

According to Norges Bank, interest rates aren’t the only thing driving demand; pandemic restrictions have left people itching to splash out on a place of their own. 

“Increased use of home offices and limited consumer opportunities to spend disposable income has probably also increased demand,” the bank said in its monthly report for June. 

How long will prices continue to rise? 

Experts have said that house prices are unlikely to continue to skyrocket as they have done over the past year and are instead facing a “headwind” in the form of higher interest rates on the horizon and stricter credit regulation. 

“The strong rise in house prices is facing headwinds in the form of higher interest rates, stricter credit regulation and high construction activity in several places,” Christian Fengstad Bjerknes of the Co-operative Housing Federation of Norway (NBBL) said in June.

“We are likely to have a period of moderate price development. However, it is not unlikely that prices will fall over the autumn, as they typically did before the pandemic,” Real Estate Norway’s managing director Hennig Lauridsen had previously predicted when speaking to financial site E24.

Lauridsen believes that the pandemic will continue to have a long-lasting effect on the demand for housing in Norway. 

“We believe that the strong demand for housing in Norway will persist and that the pandemic has led to a lasting shift in the housing market,” he said. 

Looking ahead to 2022, there’s plenty of uncertainty over the future of house prices as Minister of Housing Nikolai Astrup has laid down new rules that will regulate housing valuations in Norway. 

The new regulations are set to come into effect on January 1st 2022, unless they are scrapped by the current government or a new coalition government after September’s general election. 

“This new legislation would regulate over 100,000 transactions in the housing market and will have major consequences for Norwegian consumers with increased costs, increased risk and increases insecurity if the legislation isn’t properly done,” Lauridsen said. 

What will the changes to interest rates and regulation of property valuation mean for you? 

In short, this is good news for those looking to buy or get on the property ladder but bad news for those looking to sell over the next couple of years. This is because higher interest rates will gradually bring house prices down. 

“We expect a better balance between supply and demand with a shift from a seller to a buyers’ market. This (interest rate rising) will provide a more sustainable housing market in the time to come,” CEO of the Norwegian Real Estate Association Carl Geving said in the associations latest monthly report. 

READ ALSO: Is it better to buy or rent property in Norway?

Interest rate price rises could also hit the pockets of those who have recently bought a property with a flexible rate mortgage, as interest rates are expected to rise 1.5 percent by the end of 2022. 

Furthermore, if the new regulations on property valuation do come into force then those selling their house may get less than they were expecting depending on how well the rules are implemented. 

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RENTING

Mould at home: What rights do you have as a tenant in Norway?

Some of Norway's largest cities, such as Bergen and Trondheim, are notorious for wet and grey weather. Therefore, it's no surprise that mould is one of the most common disputes between tenants and landlords.

Published: 23 April 2024 16:07 CEST
Mould at home: What rights do you have as a tenant in Norway?

If you’ve relocated to Norway from warmer parts of the world, mould might not be among the first things that come to mind when it comes to tenancy disputes.

However, Norway is a country with generally high precipitation levels, especially in its western and central regions.

Mould is often caused by several factors. The first is usually the local weather, but equally important are the overall condition and circumstances of the property (for example, if you’re living at the ground floor level, you may experience higher humidity) and how you, as the tenant, use it.

But what should you do if you get a mould problem in your rental home?

The starting point

Under Norwegian regulations, the initial responsibility for ensuring that there’s no mould in a rental property falls on the landlord.

They are responsible for ensuring that the unit has all the essential systems in place to prevent mould from appearing, such as standard ventilation and heating.

You’ll also need to invest in a dehumidifier in some buildings.

If you expect your home to have a somewhat high humidity level, the 2,000-4,000 kroner price tag will be well worth it as a mould prevention measure.

That’s why many tenants in Bergen in western Norway consider these devices a must-have.

In any case, if you notice mould in your rental home, notify the landlord as soon as possible. If not addressed immediately, it can quickly spread and cause extensive damage.

Your responsibilities

Are you ensuring a reasonable level of ventilation in your home? Do you let fresh air in and keep the in-built ventilation openings unobstructed and open?

Have you left some space between the furniture and the outer walls? Are you making sure that your home is well-heated?

READ MORE: Landlord or tenant: Who pays which costs in Norway?

If you answered negatively to any of the questions above, you might be at risk of mould in your home.

As the Rent Disputes Tribunal (a state-run entity under the Norwegian Ministry of Local Government) points out on its website, mould thrives on water and temperature, so if you notice high humidity levels in your rental, take action and reduce moisture.

Dealing with mould as part of maintenance

When it comes to maintenance, both the tenant and the landlord have certain rights and obligations.

Unless there’s a different agreement or contract in place, the landlord will generally need to take care of maintenance.

You’ll still need to look after items and elements that don’t fall in the category of fixed property.

Accidental damage repairs don’t fall under maintenance – so you’ll need to cover these expenses. The same is true if you don’t properly care for the property, resulting in mould spreading in the rental.

Resolving (mould) disputes with your landlord

In many cases, disputes with your landlord regarding mould issues can be resolved through open communication and a clear understanding of both parties’ rights and obligations.

Here, addressing concerns swiftly and documenting any communication or actions taken regarding the problem is crucial.

READ MORE: The most common disputes between tenants and landlords

Also, if initial attempts to resolve the dispute fail, you should consider seeking outside assistance – Leieboerforeningen, a national organisation for tenants, and Forbrukerrådet, the Norwegian Consumer Council, can both point you in the right direction.

One avenue for resolving disputes is to submit a complaint to the Rent Disputes Tribunal, which serves as a neutral party to help resolve such disagreements when it comes to rental issues, including mould-related concerns.

You’ll need to present your case to the tribunal, which means you’ll have to provide evidence and documentation to support your claims.

Extreme cases: Termination of a tenancy contract due to mould

In extreme circumstances, you, as the tenant, have the right to terminate the contract with immediate effect due to mould.

READ MORE: How to get out of a rental contract in Norway

What constitutes extreme circumstances, you ask?

Among other things, the severity of the mould problem and how long the issues have lasted without the landlord rectifying the situation (in cases where such measures fall under their responsibilities).

In any case, the mould issues need to constitute a severe breach of contract if you want to use them as grounds to terminate the lease with immediate effect.

If you’re in the right, you will not be obligated to pay rent after leaving the property, and you might also be able to claim compensation for the costs you incurred due to the situation.

However, if you terminate the tenancy agreement without having a right to do so, your landlord may try to claim both rent and compensation for incurred costs and other expenses.

It’s always a good idea to consult a legal professional if you’re unsure whether this applies to your case.

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