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House prices in Oslo continue to rise. This year, prices also went up in September, a month in which previous years have often been a bit boring.
In the last twelve months, house prices have risen 7.7 percent.
– Oslo is characterized by the supply of housing to a lesser extent meeting the demand. Abnormally few houses are being built and completed in Oslo, and we are concerned that an unbalanced market will result in stronger-than-desired price growth, said executive director of the Norwegian Real Estate Association, Carl O. Geving, when they presented the statistics.
New construction director Jørn Are Skjelvan at DNB Eiendom told Børsen that the problem was that they were allowed to build too few small apartments.
– If we could have offered apartments of 20 square meters, the calculation would have been completely different, he told Børsen.
Irritated
Statements like this have long irritated Oslo’s Acting Urban Development Councilor Arild Hermstad (ODM). On the other hand, you agree that high prices are a big problem.
– Of course, it is worrying that prices in Oslo are rising. We want it to be possible to settle in Oslo for all occupational groups, and we also need affordable housing. The question is what should be done, says Hermstad.
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Wants housing minister
Arild Hermstad believes that the problem will not be solved in Oslo as long as the use of housing as an investment object is so favorable.
– I react when the real estate industry gets rid of simple solutions that are not housing taxes, he says and points out that about 40 percent of homes of less than 35 square meters in the capital, are now owned by people who do not live there, he points out.
– The objective that everyone has their own house is very good, but the results have been that it is also beneficial to have two, three and four houses. In times of uncertainty, such as those we see now, housing is seen as an object of speculation. It must be solved at the national level, Hermstad believes.
Call for a clearer division of responsibilities.
– If it had been a Minister of Housing, the instruments could have been seen as a whole. They have it in Denmark, for example. Much is decided at the national level and we believe that the government does not have an active policy for that, he says.
Investigation of additional taxes
However, the Oslo City Council says it does not believe the current government will do anything about the tax regime.
Instead, they look to see if there is anything that can be resolved locally.
– We are now analyzing in Oslo if we can have a different property tax for secondary residences. This will make it less attractive to consider the home as an investment item.
– Is there something you are considering presenting?
– Currently, it is at the study level. But what we’ve seen so far is that such a tax can increase supply for first-time buyers and help curb growth in home prices. It will also mean that we will have fewer empty houses, says Hermstad.
He emphasizes that it is currently not clear if this is something they can do with current regulations and therefore it is a long-term job.
– It is insane legal if an adjustment has to be made, or if there is something we can do with the current legislation, he says.
– Old accusation
He totally rejects the arguments that Oslo politicians should regulate more housing areas and allow a higher proportion of small apartments.
– That we just have to regulate more homes is an accusation we have heard from the industry in all the years. We have 27,000 homes in the housing stock, and 10,000 of them are fully ready for expansion. If the industry wants to build more, there are many things they can start with, he says.
It also upholds the apartment standard, which sets guidelines for what proportion of small apartments can be built in areas close to the city center.
– We find ourselves all the time that we must have several small apartments in Oslo. But we want to create a good city, where people will live. We don’t want dormitories and ghettos. We want a city with qualities not only based on the needs of developers. They want smaller apartments because then they earn more, he says.
Works with the third sector of housing
The Oslo City Council, made up of the Labor Party, MDG and SV, is also trying to establish what they call a third housing sector. This will make it easier for ordinary people to enter the market, for example through rent-to-own housing.
– We will start a pilot project to be completed in 2023 to lower the initial housing threshold. But we would have liked to have had the opportunity to make demands on this in the larger private projects.
So I think developers can do more, if they want to reduce case processing time, of course they can plan projects that are in line with the guidelines that we have set. Sometimes it takes a long time because they want to push big projects on small plots. But if we’re really going to do anything about the price gallop, we have to look at the home tax regime, he says.
