Monday, August 2

Property in Norway: what to expect if you are buying a house in Oslo

Oslo is a popular city in Norway for foreigners with many job opportunities, a lively cultural scene and Nordic charm. This international center is also known for its sky-high real estate prices. Yes, you have to pay, but many believe that shopping in Oslo is a safe investment in a great place to live.

Why buy?

In this bustling city surrounded by nature, buying is highly favored over renting. This has a lot to do with tax rules around housing. To begin with, there are nor housing tax. The tax on the benefit of living in one’s home was eliminated in 2005. There is also an interest deduction rate of 22 percent. So if you pay 10,000 crowns on your mortgage every month to the bank, you will receive 2,200 crowns from the state. Note that you must be the one who lives in your home in order to receive tax incentives. If you rent to tenants, you will not receive money from the state.

Even if you don’t see Oslo as your forever home, statistics show that buying a property in the capital is a pretty safe investment, that’s because House prices in Oslo have been rising steadily for the past 15 years.

And growth does not appear to be slowing down.

Carl Geving, executive director of the Norwegian Real Estate Association, said Nordre Aker: “Price increases in Oslo will continue due to low interest rates and poor housing construction.”

Possible obstacles

Oslo view near 20,000 home sales per year. That’s more than the sales of other big cities like Bergen, Stavanger and Trondheim combined.

And yet the supply has not yet met the demand.

Real estate agent Anders Nykkelmo Solem believes that the hardest part of buying property in Oslo is tThe small number of homes available on the market.

“There is very little to choose from, nor does it seem to show an increase in the short term,” he told The Local.

If you are looking for a home, it can be even more difficult to find one in your price range. Oslo currently has 697,010 inhabitants and more than a third of them live in apartments. It seems that there are new residential real estate developments in the making everywhere in the capital city and most of them are apartment buildings. Recently, there were 27,184 single-family homes in Oslo and 248,276 apartments.

Recently an 11 square meter “micro-apartment” was put up for sale in the city center of Oslo for a whopping 2.4 million crowns (€ 240,000 or $ 280,000), that is, 219,000 crowns per square meter or € 21,000 or $ 25,868.

It can also be difficult to enter the real estate market if you are on a lower budget.

Student and first time buyer Anders Ramvik said: “I chose to buy in Drammen, a neighboring city of Oslo. It was impossible to get what I wanted in Oslo with such extreme prices. ”

Where can I get the most out of my price range?

If there is no leeway in choosing a more affordable neighboring city outside of Oslo and you really want to be in the capital, then you should look to the east of the capital.

“In thand districts Gamlebyen, nye Gamlebyen, Tøyen and Ensjø you get more property options for your money compared to other neighborhoods in Oslo, ”says real estate agent Nykkelmo Solem.

“Also, public transport, services and everything else is absolutely on the same level as the other side of town.”

The buying process

Start by making a list of your “must-haves.” And know your budget or bid limit (because there is often a bidding round). Get familiar with the different districts and what they have to offer. It would also be smart to check how much the houses have recently sold in the desired areas.

You probably need a loan, so it’s time to go to the bank. Do this in the early stages before getting your hopes up or wasting time searching the wrong price range.

The Sørenga project in Oslo, part of the large Fjord City development project. Photo: Kurt: S / Flickr

You can start going to shows before or after you receive your loan quote from your bank. Control for a list of what is currently for sale. Realtors often have two rounds for the public to view listings, which are generally only open for a few hours at a time.

the sales report or the “sales report” of the listing information is delivered on display and is also online with the listing. Take your time and read this carefully if you are seriously considering bidding. It is in this sales report that you will find important information, such as what needs to be repaired and what has recently been updated. Keep in mind that problems with the bathroom, electrical installations, drainage, roofing, and plumbing are expensive to fix and should be factored into your budget.

There is also a classification system to become familiar with in the report:TG: 0, TG: 1, TG: 2 or TG: 3. These ratings show the degree of condition of the parts of the house. TG: 0 means that the listed appliance, item or area is in excellent condition, while TG: 3 applies to something that is completely dysfunctional and is about to collapse.

If you have any questions before bidding and cannot find the information in either the sales report or the online listing, please contact the listing agent for a follow-up.

If you want to make an offer

Property bidding rounds in Oslo usually take place the day after the last showing. You can bid by text message or by phone through communication with the property owner or real estate agent. Often there is a time limit on how long you can bid, which must be stated before the process begins. If you win the bidding round (or if you were the sole bidder), the property is yours.

It is standard in Norway to move into your new home already a few months after your offer is accepted.

If you want to have a second property in Oslo

Buying a second home in Oslo comes with a different set of rules. Typically, for your first property purchase, banks require you to have about 15 percent of the loan you receive already in capital saved. But if you are looking to get a second mortgage for a second home, there is a demand that you must have at least 40 percent of the loan amount already in the bank. This is aimed at preventing the wealthy from taking over multiple properties, making it even more difficult for first-time buyers to enter the real estate market in Oslo.

How has Covid-19 affected real estate in Oslo?

The pandemic has certainly impacted the property market in Norway, but much less so in Oslo. Last year, Oslo saw a spectacular increase of 12 percent in residential housing prices. The city also broke price records per square meter.

In 2020 the average price per square meter of apartments in Oslo it was 83,181 crowns.

During the current Covid-19 crisis, apartment and house projections have had to change. Potential buyers are often limited to 15 minutes per display and there is a restricted number of viewers allowed on a property at a time. You can request a private viewing, although there is no guarantee that you will get one.

But locals don’t seem to mind the added stress it can add to the home buying process.

“Okay. Everyone understands this, and we brokers and home buyers alike appreciate that we can keep the housing market going,” says Nykkelmo Solem.

Useful vocabulary

  • Property – Property
  • Grant – Price
  • purchase – Buy
  • Points of view – Projections
  • Round of offers – Round of offers

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