Rental prices are growing more than inflation, according to the rental platform.
RENTAL: House prices have risen, but rental prices seem to rise more. Photo: Stian Lysberg Solum / NTBPublished: Published:
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The average price for renting in Norway has risen by 7.4 per cent compared to 2022. This is shown by fresh figures for the second quarter of 2023 from Husleie.no.
The rental platform has approximately 90,000 landlords and 70,000 tenants. In 2022, 40,000 leases were created on the platform. They have a share of 20 percent of the rental market.
Now the national average rental price is NOK 12,222.
In Oslo, the price is up a whopping 8.4 per cent compared to the second quarter of last year. Now the average price for renting in the capital is NOK 15,990.
In one quarter, monthly prices in Oslo have risen by NOK 1,133.
Trondheim has the country’s strongest growth, with a jump of 8.6 per cent since last year.
PRICE SHOPPING: Trondheim has the country’s strongest growth in rental prices. Photo: Kallestad, Gorm / NTB scanpix
Not just inflation and interest
The general manager of Husleie says there was a warning about a development with a sharp rise in rental prices.
– For many tenants, it will obviously be tough going forward, when the rent increases by over NOK 2,000 a month at most. I hear from many landlords every day that they are just waiting for the lease period of typically three years to expire. Then they can raise the rent far more than the consumer price index, says Olsen.
The rental prices in the second quarter
According to Husleie.no, rental prices have risen:
7,4 percent on national basis8,4 percent i Oslo6,9 percent i Bergen8,6 percent i Trondheim8,49 percent i Stavanger/Sandnes7,6 percent i Porsgrunn/Skien5,6 percent i Drammen2,8 percent i Kristiansand
Source: Husleie.no
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In comparison, the total price increase in Norway in May was 6.7 compared to May last year. At the same time as inflation has made it more expensive to live, Norges Bank has raised the key interest rate to 3.75 per cent, and announced further increases.
However, Olsen does not believe that this is the only reason for the high rental prices. He also believes that increased tax pressure causes landlords to raise prices. In addition, he points to the housing shortage, which is becoming increasingly acute.
Managing director Kjetil J. Olsen at Husleie.no. Photo: Heidi Marie Gøperød
– This is primarily due to political decisions where it has become much less favorable to invest in housing for rent – this applies both to private individuals who have often rented out an apartment or two, or larger rental companies. Due to increased valuation of secondary homes and increased property tax, the margins on letting have become very poor. Increased interest, increased material costs, increased joint expenses in condominiums and low housing construction worsen the situation further, he says.
This results in the fact that even ordinary rental apartments now have to be rented out for very high prices.
– Put simply, it has become impossible to make money renting out a three-room flat in central Oslo for NOK 16,000 per month. We therefore now see that tenants will struggle to find a 3-room apartment in Torshov of between 65 and 70 square meters for less than NOK 20,000 per month. Just a year ago, that would have been considered an outrageously high sum, says Olsen.
Several have asked about postponement
In May, house prices had risen by 7.7 per cent. On Wednesday, the figures show how much prices have risen in June. Prices are predicted to flatten out a bit before falling sharply in the autumn.
If rental prices were to continue to rise, it could create a tough market for tenants as well, says Olsen. The high rental prices have meant that they are now seeing a strong increase in demand for deposit guarantees, and in a recent survey, 20.6 per cent of tenants say that they have asked landlords about payment deferrals in the last three months.
In addition, 33 percent answer that they have been late with the rent at least once in the last three months. A majority of 68.8 per cent of tenants say they do not think it will be more difficult to pay the rent in the next three months, while 17.9 per cent of tenants say they think it will be more difficult.
2023-07-04 13:01:39
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