The real estate market in Norway was at its peak in 2007 but weakened the following year with the global economy. In 2009, when the crisis subsided and banks loosened loans, prices rose again.
They may not be at pre-crisis levels but the market is starting to look healthy again. The data showed that rowing homes grew the fastest, followed by individual homes and then multi-dwelling homes. The low-interest-rate was also a major driver.
Prices vary in different parts of the country, with the most expensive properties in the capital and major cities. The high cost is due to the demand for high-quality housing rather than simple and inexpensive. Homes in Norway are well built with every room having a heater due to the cold weather.
Norway’s strong economy and flexibility to the global financial crisis will further improve the real estate business in the country. The improvement in oil prices contributes to the growth of the economy as Norway is the third-largest oil exporter in the world.
Unemployment in Norway is also relatively low. Norway has 10%, more than 2% in the UK, and 6.5% in the US and Canada, possibly a second home due to lower transaction costs and lower mortgage rates. Analysts say housing prices in the country continue to rise.
Buying a property in Norway
Local and foreign alike are free to buy or occupy or invest in real estate in Norway. There is no property tax in Oslo, but there is a 2.5% transfer tax known as a documentation fee for each sale of the property.
Houses or flats in Norway are acquired through competitive bidding among buyers. A deadline is set for final bids. If the bid is given then each bid is binding and must be given. Until each bid winner is awarded, he or she should not participate in multiple bids.
Buying property in Norway is best done through real estate agents who represent both sellers and buyers. This is typical for agent fees for buyers. The first step is to come up with a sales contract, which acts as a guide for the entire transaction. The second stage is when the seller issues the deed to the buyer.
The final stage is when the registration authorities issue a certified copy of the land register. Both the buyer and seller have the right to cancel the contract, withdraw any payment or seek compensation if the contract is breached by the other party.
Renting in Norway
In rented properties in Norway, there should always be a written tenancy agreement between the landlord and the tenant. There are two main types of contracts, namely, fixed-term agreements and open agreements.
Rent leases are normally for one year and can be replaced. The landlord requires a deposit, and this amount does not exceed the rent of six months. This amount will be deposited in a designated Norwegian bank, and the tenant has the right to receive interest income on this deposit. Leases must be advised for three months before the expiration of the contract. A written explanation will be required.
The fares in Norway are relatively high, and this may be due to the high-quality standards in the country. Despite this, there is no asset monitoring, so competition can be tightened. Property listings can be found in advertisements or online. Real estate agents are also available, and they can be found on yellow pages.
These agents usually offer long-term contracts, but some of them offer shorter trial periods. Character and bank references are usually required from tenants and credit checks can be performed.
Property Purchase Process in Norway
All types of individuals and entities are legally entitled to self-possession, and invest in real estate.
- His fees are usually required by the buyer.
- The sales contract is very essential in the procurement process. It guides the entire process and also protects both parties in case of breach of contract. This document is prepared and later kept by the agent.
- The deed will be retained by the agent until its registration.
After registration, a certified copy of the land register is issued by the registration authorities. It denotes the title owner’s name and any encroachments associated with the property.
The single process required to register a property in Norway takes about three days to complete.
Total transaction costs in Norway are very low
According to Realtybang, total transaction costs range from 3.76% to 5.64%. The buyer pays all costs including 2.5% stamp duty. Real estate agent fees range from about 1% to 2.5% (plus 25% VAT).
Landlord and Tenant
Tenant Protection Laws Are Neutral
Norway’s law is neutral between landlord and tenant.
Rent: The rental market is free; Tenancy’s Law (2000) removed previous rent control, except for Oslo pre-war housing. Rents obtained in agreements are comparable in new lettings with similar properties. In practice, it is not favorable for landlords.
Tenant Security: Notice of termination of the contract is not required when the contract expires. However, if the tenant continues to occupy the premises for more than 3 months at the end of the contract and the landlord does nothing about it, the agreement becomes an unspecified term agreement.
Residential properties in Oslo have yields ranging from 3.1% to 4.6%, with smaller properties yielding higher than larger properties. After 8 years of consecutive house price increases in Norway, Oslo’s residential property prices are very high, making Oslo the 17th most expensive city in the world to buy a house but prices have dropped this year.
In terms of residential prices, we assume that Oslo is the eighth-most valuable capital in Europe, and surprisingly does not have the lowest rental yields in any of Europe’s capitals. Transaction costs are low in Norway.
Taxes are usually high
Rental Income: Rental income of non-residents is taxed at the rate of 22%.
Capital gains: Capital gains from the sale of real estate property are taxed as simple income of 22%.
Inheritance: Norwegian inheritance and gift taxes were abolished on 01 January 2014.
Spouse’s inheritance is not taxed. Inheritance for children and parents over NOR470,000 (€ 62,710) is taxed from 6% to 10%.
Resident: Residents are taxed on their worldwide income.