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Monday, July 22, 2024

High housing prices spread outside Oslo

Oslo’s housing affordability problem is now spilling over into the entire metropolitan area. Even though Oslo’s record high prices have declined slightly in recent months, June sales still boosted them by just over 10 percent compared to June of last year, and the situation is similar from Drammen to Moss, Fredrikstad and Sarpsborg. 

There are still lots of housing developments underway in Oslo, adding some supply to the ongoing demand. Some of the biggest price hikes are now being registered outside the city. PHOTO:

“I was absolutly shocked,” first-time buyer Oda Kristine Nygaard told state broadcaster NRK. “There are some absolutely crazy prices out there.” She works full-time in a day care center and had manged to save around NOK 150,000 (USD 18,000) but that wasn’t nearly enough for a down-payment anywhere. Like so many others, she had to get help from her parents, even for a small, rundown flat in Moss, south of the capital.

Average housing prices in most of the larger cities around Oslo have risen 5 percent just in the past three months, reports the national real estate organization Eiendom Norge. Lillestrøm, Hamar and Tønsberg have experienced much the same.

The organization reported this week that the national average dipped 0.2 percent in June, also in Oslo. In the greater metropolitan area, however, prices are up and it only took around 15 days to sell a property in Drammen, for example, which ranked as having the fastest real estate turnover in the country. Its sell-time compares to the national average of 29 days.

“Around five to six years ago, we used to have lots of first-time buyers here in Fredrikstad,” real estate broker Michael Almvik Meyer told NRK. “But since then, the prices have shot up.” The southern Norwegian city that was built up with timber trade is now too expensive for those just starting out.

Pandemic surprise
Sales remain brisk in Oslo, too, though. “No one had expected that a pandemic would lead to record sales in the housing market in June of last year,” Grethe Meier, chief executive of the high-en real estate firm Privatmegleren, told newspaper Dagens Næringsliv (DN). “Now it looks like sales in June this year will even exceed last year’s record.”

They did, with the firm selling 2,070 homes last month compared to 2,052 in June 2020. “The housing market is extremely strong,” Meier added, but noted that a better balance between supply and demand left prices in Oslo more stable.

The price jumps in the surrounding area have been linked to buyers’ desire for more space at home because most people have been spending more time at home than ever before. Many also intend to keep using home offices, and thus want or need more than a cramped flat in the city that requires working from the kitchen table.

Moving out
“You can still get a large house in Fredrikstad for the price of a small flat at Torshov in Oslo,” local broker Meyer told NRK. “Lots of people are moving out of the bigger cities in Norway and back to where they came from.” Or, note some, to suburbs in the surrounding area from which they’ll no longer have to commute daily into Oslo even after the pandemic ends.

Many Norwegians who’ve also discovered the ease of working from holiday homes are also giving up their homes in the city and even moving to their hytter in the mountains or by the sea. They’re making major post-Corona lifestyle changes and employers are often supportive, especially when they see how they can cut costs with less need for office space.

Several other real estate firms like DNB Eiendom and Eie Eiendomsmegling also reported strong sales in June. DNB Eiendom reported that the average sales prices for its residential listings were 6 percent over advertised prices. Bidding remained brisk and some brokers reported that it only took around 16 days from listing to sale.

At Eie Eiendom, Hedda Ulvness told DN that its 1,100 home sales in Oslo were the highest ever in the month of June. “It’s a strong and active housing market now,” she said. Berglund



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