Housing prices in and around Norway’s oil capital of Stavanger have more than doubled in the past five years, far outpacing hefty price hikes in Oslo as well, and in most other areas of the country. The high cost of housing is linked to strong demand, limited supply and business development in Stavanger’s home county of Rogaland.
While housing prices in Rogaland County climbed 103 percent between 2005 and 2010, supply of housing increased just 18 percent, according to figures from state statistics bureau SSB (Statistics Norway) and Norway’s real estate brokers’ trade association (Eiendomsmeglerforetakenes Forening, EFF). A strong oil- and gas-fueled economy has especially made Rogaland’s Stavanger area an attractive place to live and work, boosting housing demand, while interest rates have remained low.
Stavanger, home to state oil company Statoil and a robust offshore industry, has been the site of what some brokers call a “bonanza” that has made its real estate market hotter than any other area in Norway. Housing prices rose 12 percent last year alone, according to EFF, and even the brokers are calling for “more reasonable” price growth in 2012.
“Something has to be done, and quickly,” Rune Bertelsen of Stavanger’s biggest real estate brokerage Eiendomsmegler 1, told newspaper Dagens Næringsliv (DN). He said there are more homes for sale in smaller cities like Bodø and Kristiansand than there are in Stavanger, and more residential construction is needed. Initial fears of the finance crisis in 2008 halted some projects, while demand continued to rise, but Bertelsen said he thinks local politicians will now help clear the way for more homebuilding.
Stavanger Mayor Christine Sagen Helgø of the Conservative Party seems keen. “If we don’t boost housing production, it will be very challenging for our region,” she told DN.
Major price hikes elsewhere, too
In the Agder counties south of Rogaland and the Stavanger metropolitan area, prices were up 84 percent and supply just 13 percent. The counties of Telemark and Møre of Romsdal reported major price hikes as well, of 76 and 75 percent respectively.
Demand for housing is also high in Oslo, where prices have risen 62 percent since 2005 and supply 32 percent. In nearby Akershus, which surrounds Oslo, prices were up 61 percent over the five-year period.
The lowest housing price growth was found in the inland county of Hedmark, where average prices for homes, row houses and apartments rose 46 percent. That’s still not bad compared to the real estate situation in most countries, where housing prices have been battered in recent years, but in Norway it’s considered poor.
Tor Selstad, a professor at the College of Lillehammer, told newspaper Aftenposten that while Rogaland County has “become very modern” and developed its potential in the oil and offshore industries, Hedmark County “has clung on to old industry” like forest products. He cited the example of a carton factory in Rena that county officials tried to keep going by investing millions in it. Instead, such business has moved out of high-cost Norway, also across the border to Sweden. “Sweden is a very aggressive competitor and has taken over much of the old industry in Hedmark,” Selstad told Aftenposten.
Hedmark’s proximity to Oslo and the main airport at Gardemoen, however, is making it more attractive as a lower-cost alternative for those willing to commute long distances. Plans also abound for improved transportation between Hamar and Oslo.
Views and News from Norway/Nina Berglund
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