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RENTING

Where in Norway have rents increased the most?

Interest rates, low supply and changes to the tax rules have been pointed to as reasons for rapidly rising rents in Norway. Several areas have seen significant increases over the past year.

Published: 10 January 2024 11:37 CET
Pictured is a home in Bergen.
House prices in Norway increased significantly last year. Pictured is a home in Bergen. Photo by Gulfside Mike on Unsplash

The average cost of renting in Norway has increased by 24,000 kroner per year over the past three years, according to new figures from the rental platform Husleie.no.

Nationwide, it now costs an average of 12,387 kroner per month to rent in Norway. The increases come just a few years after the average cost of renting in Norway surpassed 10,000 kroner per month for the first time.

Homes on Husleie.no account for around 20 percent of properties in the Norwegian rental market.

Interest rates, high inflation, and increased taxes on second homes have been pointed to as reasons for increased rents in Norway.

“There are more and more of us, and housing construction has almost stopped. As long as the framework conditions for owning housing for rent make it difficult to achieve profitability, rental prices will be high,” managing director Kjetil J. Olsen said in a press release.

While the cost of renting nationwide has increased by 7.5 percent, several places in Norway have seen much higher increases.

READ ALSO: Five common rental scams in Norway and how to avoid them

Ålesund, west Norway, saw an increase in the average cost of renting of 16 percent between the end of 2022 and the end of 2023. There, the average cost of renting was 11,850 kroner per month.

Rents have increased by 12 percent in Stavanger, also on the west coast, and it costs tenants an average of 12,912 kroner per month to rent in the city.

Trondheim has also seen a significant increase. The cost of renting in a city in central Norway has increased by 9.5 percent to 12,476 kroner per month.

Some of Norway’s biggest cities saw a decrease below the national average. In Oslo, rent increased by 6.5 percent. However, it remained the most expensive place in the country to rent by far. By the end of 2023, it cost tenants 16,011 kroner per month to rent in the capital.

Bergen has seen rents increase by 6.8 percent over the last year. Tenants in Norway’s second-biggest city paid 11,688 kroner per month on average.

Kristiansand, south Norway, saw a more modest increase of 3.9 percent to an average of 10,929 kroner per month.

Luckily for residents in Drammen, rents increased at a much lower rate than general inflation. Homes were rented out for an average of 12,800 kroner in the city close to Oslo.

The municipalities of Porsgrunn and Skien were the only areas of the country where Husleie measured a decrease in rental prices. Rents in the area fell by 1.2 percent to 9,745 kroner per month.

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ECONOMY

What lower inflation in Norway means for you 

Inflation in Norway continues to slow. However, the cost of living in the country isn’t slowing as quickly as economists expected. Here’s what that means to you. 

Published: 10 May 2024 11:44 CEST
What lower inflation in Norway means for you 

Inflation is slowing 

Norway’s Consumer Price Index, CPI, which measures changes in prices for household goods and services, has slowed yet again. 

Between April last year and the same month this year, prices in Norway rose by 3.6 percent. It marks the third time that price increases have been below four percent since the start of 2022. 

The figures, released by Norway’s national data agency Statistics Norway, mark the fourth month in a row where the 12 monthly inflation figure has been lower than the yearly figure from the month before. This means prices are rising less rapidly than before. 

“Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before,” Espen Kristiansen at Statistics Norway said. 

Food remains one of the biggest contributors to inflation 

The price of food and non-alcoholic beverages rose by 3.3 percent from March to April, according to Statistics Norway. 

Chocolate, soft drinks, coffee, and citrus foods saw the biggest price increases, which the national data agency called “unusual.” 

What wasn’t unusual, however, was the cost of food rising following Easter, when many supermarkets ran offers to compete for customers. 

“The rise must be seen in the context of the fact that large offer campaigns in connection with Easter dampened prices in March,” Kristiansen said. 

The figures for April show that food prices in Norway have increased by 6.8 percent compared to a year ago. 

The rising cost of food and drink in Norway could potentially outgrow wages this year, even if expected pay bumps will outpace forecasted inflation overall. 

Economists expected inflation to fall more 

Inflation hasn’t eased as much as some experts were expecting. Core inflation, which excludes energy prices and taxes, was measured at 4.4 percent year on year in April. This is above what economists surveyed by the newswire Reuters expected. 

Norges Bank, the country’s central bank, raised the policy rate to a 16-year high of 4.5 percent in December. The bank has said that inflation should generally be around two percent, so it has used interest rates to curb price increases. 

As inflation isn’t falling much quicker than expected, economists predict that the central bank may wait until December before slashing rates – which for consumers means that loan and mortgage repayments will remain high for the foreseeable future. 

“The fall in inflation has not been much greater than Norges Bank has thought. This, therefore, indicates that an interest rate cut may come in December instead of September,” Kjersti Haugland, chief economist at DNB Markets, told public broadcaster NRK. 

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