Almost 80% of people in Norway own their own home.
Self-owning has been official policy in Norway since the 1950’ies. During the next decades there was a big development of what we call social housing construction in the whole country. Organizations like OBOS – the biggest housing cooperative organisation in Europe, and other local organisations were established in most cities. They cooperated with the municipalities who made plots and areas available.
The State Housing bank gave mortgages to both builders and private people to finance the home building.
The taxation of property has always been very low in Norway, and you also get tax-deduction when you are paying interest on mortgage. (Today 22% tax deduction)
And there are no taxation on the gain when selling your home.
Until 1983 sales prices were regulated. When the regulations were repealed, there were no way back. From that time, it was all about the market!
The market regulations have functioned quite well for most people. The prices have been rising and people have been able to use their property values to ” climb up the housing ladder”.
Lately we have seen that some people have not been able to buy their own home, because of the requirements for equity and lack of ability to pay the cost of a mortgage. Almost 50% of first-time buyers gets help from their parents to buy their own home. The percentage of self-owners have decreased a little bit lately. And many experts doubt whether we will be able to keep up the big share of self-ownership, what we call the Norwegian Housing model, in the future. Even if it is a goal for all political parties.
Because of the self-own policy, the rental market is not as safe for tenants as we could wish for. As a tenant you are depending on renting from private self-owners on a 3-year contract. And you will not get any of the tax advantages that self-owners have. Therefore it is not regarded very attractive to rent your home in Norway.
As a home buying consultant I strongly recommend all people who ca to afford it, to buy their own home. It is both safe and profitable. It is my impression that people from other countries that settle in Norway, also after some time, are eager to buy their own home. They experience the economic benefits that comes with self owning, and what most of their their Norwegian friends and colleagues do.
It is of course not completely without risk buying a home in Norway. The market goes up and down and it is important to buy a property without errors and omissions. You should have a 3 -5 years perspective on the purchase, and get help to secure that you are paying the correct market price.
And be aware of the buyers duty of inspection. It is essential that you can read and understand all the sales information. Therefore, if you are an English speaker, I strongly recommend that you get help from a home buying consultant (like me:)
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