There has been a significant increase in housing prices in Norway in 2023, with an increase of 7.7 percent since the turn of the year. The average housing price is now 4.7 million kroner, and in Oslo, the average price is 6.5 million kroner, which is seven percent higher than at the beginning of the year. This is happening despite eight interest rate hikes from the Norwegian Central Bank over the past year and increased prices for food, insurance, holidays, and electricity.

Simultaneously, the proportion of rental properties in major cities is declining, with over 6,000 rental properties disappearing from Oslo alone in recent years. This represents more than ten percent of all rental properties in Oslo. In addition, the assessed value of secondary residences has increased by over 400 percent over the past five years, which has led many landlords to view renting out properties as a loss-making project, due to high wealth taxes and dividend taxes. In some cases, owners lose money by renting out properties, leading to a drastic decline in the supply of rental properties.

At a time when rental prices have increased by over ten percent, the highest increase ever recorded by Eiendom Norge, this could have serious consequences for renters and first-time buyers who do not receive help from the "bank of mom and dad". The loss of rental properties and rising ownership costs will likely lead to a further increase in rental prices between 40 to 60 percent over the next few years.

These housing market trends are grim, but they also clearly illustrate the need for new approaches to the housing market. Rent-to-own could be the key to solving this complex puzzle, offering hope to many who dream of owning their own home in a time of high housing prices and declining availability of rental properties.

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Sources: Dagens Næringsliv

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