Buying a property in Oslo: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Oslo's property market is included in our pack

Thinking of investing in real estate in Oslo? You're not alone!

Many people are drawn to Oslo's Scandinavian beauty and fantasize about owning a stylish apartment or a traditional house there.

Is it worth investing there, though? Are property prices increasing in Oslo? How much does it cost? Is it wiser to buy property in Frogner or Grunerløkka? What are the taxes? Which place will give me the best yields?

We have the answers.

The Investropa team has done their homework and know this market well. As a matter of fact, we've put all our findings together in a pack. Get it now.

In the lines below, we'll share useful information and some practical tips.

How is the property market in Oslo?

Are property prices rising or falling? Let's consult the most recent data and stats.

Property types

In Oslo, there are various types of properties available for sale, catering to different preferences and needs.

These include apartments ranging from cozy studios to spacious penthouses, ideal for individuals and families alike. Additionally, there are charming townhouses with unique architectural features and private outdoor spaces.

For those seeking more space, detached houses offer larger plots and more independence.

Waterfront properties provide picturesque views and easy access to Oslo's scenic surroundings, while modern condos often come with amenities like gyms and security.

Overall, Oslo offers a diverse range of properties for sale, ensuring there's something suitable for everyone's lifestyle and preferences.

Buy or rent?

(If you're keeping it for yourself and not renting it)

Whether you're already living in Oslo or considering it for your future, you might be wondering about the advantages of buying a property versus renting in this Norwegian capital.

Without a doubt, it's better to buy if you want to invest in a long-term asset that can appreciate in value over time.

Our advice? Use the property price-to-rent ratio as your decision-making compass. You can think of it as the time it takes for rental income to equal the property's current purchase price.

According to Numbeo, the property price-to-rent ratio in Oslo is around 31.91, which is significantly above the world average.

This value shows that it would take you 32 long years of paying rents before you can own a property in Oslo. Renting for such an extended period means you wouldn't be building any equity, and you might end up spending more money without gaining ownership of the property.

Property prices in Oslo

On average, according to the last data from Eiendom Norge/Real Estate Norway, purchasing a property in Oslo will cost you around $8,700 per square meter.

There are big differences, obviously. A waterfront property in Oslo might have a different price per square meter than an apartment in Frogner. We actually give you a more detailed breakdown in our pack for buying property in Oslo and in Norway.

To give you a sense of scale, it is similar to the prices you can find in a city like Ibiza.

Moreover, housing prices in Oslo are slightly higher (6%) than in Stockholm.

The most expensive neighbourhoods in Oslo are probably Frogner, St. Hanshaugen and Majorstuen, while the cheapest are likely Grorud, Alna and Stovner.

Trends

First and foremost, we have to acknowledge that Norway is, today, an incredibly stable country. The last Fragile State Index that has been reported for this place is 15.6.

This is important to remember when wondering if it's a good investment to buy a property in Oslo.

On the longer term, the growth will still be there since Norway's economy is expected to soar by 9.3% in the coming 5 years, resulting in an average GDP growth rate of 1.9%.

If you intend to invest in real estate in Oslo it's a positive signal because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.

Also, in Norway, the average GDP per capita has changed by 4.3% over the last 5 years. It's not much, but the growth is here.

This is a strong positive signal: housing prices in Oslo might become more expensive in 2024 and later on.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Norway right now.

Buying property in Oslo

Buying real estate in Oslo can be difficult due to a lack of reliable and up-to-date information about the market. That's why we have created the pack to buy property in Oslo and in Norway.

Buying process

In our pack, we've explained the entire process of buying properties in a detailed way. We've pointed out the mistakes to steer clear of, shared tips for finding properties that give you the best returns, and provided information about taxes and necessary documents.

Now, we're giving you a simplified version of the buying process.

This is the step-by-step process to purchase a property in Oslo:

1. Research Oslo's property market and set a budget in Norwegian Krone (NOK).
2. Engage a registered Norwegian real estate agent to assist with the search.
3. Identify suitable properties and view them in person, considering proximity to public transport and amenities.
4. Conduct a thorough inspection and check for any Radon gas levels (common in Oslo).
5. Secure a loan pre-approval from a Norwegian bank.
6. Make an offer to the seller through your agent using a standard Norwegian property purchase form.
7. Negotiate the price and terms of the sale, considering completion conditions.
8. Sign a written agreement with the seller (Kjøpekontrakt) and pay a deposit (usually 10% of the property's value).
9. Conduct due diligence, including obtaining a property survey (Takst) and reviewing the Energy Performance Certificate (Energimerke).
10. Finalize the purchase by transferring the remaining funds and paying the one-time stamp duty (Dokumentavgift).
11. Register the property with the Norwegian Land Register (Grunnbok) and update utilities and services ownership.
12. Complete the process by obtaining the keys and possession of the property.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Norway.

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Where to find a property

Discover your ideal property in Oslo through these websites:

• RE/MAX - A reputable real estate company operating across Europe, offering services for property buyers and sellers in various regions.
• Trulia - Providing neighborhood insights and real reviews to help you find the perfect home and community for your lifestyle.
• Realtor - Offering a comprehensive list of for-sale properties and empowering home shoppers with valuable tools and resources.
• Geoln - An international real estate search engine connecting buyers and developers with verified properties worldwide.
• Norwegian Property - A fully integrated commercial real estate company in Norway, specializing in property development and creating engaging meeting places.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Norway.

What properties?

As mentioned before, the average price per sqm in Oslo is $8,700. A 1-bedroom property with 60 square meters of space would cost approximately $522,000, and a 2-bedroom with 85 square meters of space would cost approximately $740,000.

However, the amount you pay for a property can be different based on its characteristics and where it's found.

Housing prices in Oslo's top areas are usually more expensive. To get a condominium in Frogner, you might need about $1,000,000, but an apartment in Majorstuen could be priced at $920,000.

Some locations are not as expensive. You may find a condominium in Søndre Nordstrand for $290,000, or you might come across a condominium in Grorud priced at $230,000.

We give more details about property types and areas in our full pack for buying property in Norway.

Common mistakes

Here are the main pitfalls specific to buying a property in Oslo, Norway:

• "Borettslag" rules: Limited ownership rights in cooperative housing complexes may restrict renovations or usage.
• "Festetomt" properties: Long-term leasehold land can lead to uncertainty and unexpected costs.
• Seasonal variations: Extreme weather conditions in Oslo may impact property maintenance expenses.
• Heritage restrictions: Historical preservation regulations may limit modifications to older properties.
• "Dugnad" obligations: Mandatory communal work for maintenance can be time-consuming for property owners.
• Cooling-off period: Limited time to reconsider a purchase after signing the contract.
• Higher closing costs: Additional fees for real estate agents and transfer taxes can be substantial.
• Norwegian language barrier: Legal documents and contracts may be in Norwegian, requiring professional translation.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Norway Property Pack

Living in Oslo

Living in Oslo is a great experience, with plenty of cultural activities, a vibrant city center, and easy access to nature and outdoor activities.

Cost of living

The cost of living in Oslo is generally quite high. Rent, food, and transportation can be particularly expensive, but the city is also known for its high quality of life.

Here are some examples to better understand the cost of living in Oslo, Norway:

• A cup of traditional Norwegian mulled wine (gløgg) at a local café: $6-$8.
• Rent for a one-bedroom apartment in the Grünerløkka neighborhood: $1,800-$2,800 per month.
• Monthly Ruter public transportation pass for zones 1 and 2: $100-$150.
• A bottle of Norwegian mineral water (e.g., Isklar) at a grocery store: $2-$3.
• Utilities (electricity, heating, cooling) for an 85m² apartment in Oslo: $150-$200.
• A slice of lefse, a traditional Norwegian flatbread, at a bakery: $3-$5.
• Entrance fee to the Munch Museum, showcasing Edvard Munch's art: $10-$15.
• Health insurance coverage for a family of four: $300-$500 per month.

Neighbourhoods

Since we aim to make information easy to understand, we've created a summary table outlining the different neighborhoods in Oslo. For yields, prices and rents, check our property pack.

Life in Oslo

Oslo is an economically prosperous city with a strong international presence. It has a high GDP per capita, a low unemployment rate, and a diverse range of industries from finance, energy, and IT to shipping and manufacturing.

From the data reported by the IMF, Oslo's GDP constitutes nearly 13% of Norway's GDP. That's a good thing because residents of cities with solid economies usually enjoy better quality services, contributing to a higher standard of living.

What expats usually like the most in Oslo is the abundance of outdoor activities, such as skiing, hiking, and sailing, as well as the vibrant cultural scene with its many museums, galleries, and music venues.

Regarding safety, the crime rate of Oslo is around 33, which is not concerning. Oslo has low levels of crime due to its strong focus on social welfare, education, and crime prevention initiatives.

A good point for a property investor - Oslo has an extensive public transport system including a metro, trams, and buses.

Access to healthcare in Oslo is more than excellent, with a Healthcare Index of 79. A robust healthcare system always reflects positively on real estate.

Finally, it is worth noting that the University of Oslo ranks among the top 150 universities in the world.

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Renting out in Oslo

This section is for those who are looking to purchase a property not to live in themselves, but to rent it out and make an income from the rental.

Long-term

Tenant Profiles in Oslo

According to the data reported by Wikipedia, the home ownership rate in Norway is 80%, which is rather high.

It is probably a bit less in Oslo though.

If you decide to buy and rent out to long-term tenants, you should target students, young professionals, and families looking to settle in the city. Oslo also has a large expat population, so targeting those looking for short-term leases can also be a viable option.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Oslo are floating around 2 or 3%. It's low. A good rental yield is typically considered to be around 7% or higher.

Rental yields in Oslo tend to be highest for smaller properties in the inner city, due to their relative scarcity and high demand from students and young professionals. Properties in the suburbs tend to offer lower rental yields due to their larger supply and less central location.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Oslo are taxed at 22%, which is not bad.

Short-term

You could also decide to rent short-term to tourists visiting Oslo or those travelling for business. Students attending universities in Oslo are also potential tenants for short-term rental.

If you decide to go with that option, look for properties in Frogner, Grünerløkka, and St. Hanshaugen, as these areas are popular for short-term rentals. They are close to the city centre and offer a variety of attractions for visitors.

Currently, there are approximately 6,000 active Airbnb listings in Oslo, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $139.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Oslo can make around $1600 per month. Also, the average occupancy rate is estimated at 70%.

Is it worth buying real estate in Oslo then?

Buying property in Oslo can be a smart move if you're looking for a long-term investment in a stable and economically thriving city. Oslo's low crime rates, strong social welfare system, and expected economic growth make it an attractive option for those seeking financial security.

If you plan to live in Oslo for an extended period, buying property is often more financially prudent than renting, as high property prices and a relatively low property price-to-rent ratio mean that renting for years could mean spending more without building equity.

Plus, Oslo offers a diverse range of property types, ensuring there's something to match everyone's lifestyle and preferences.

However, it's important to be aware of the challenges. Oslo's high cost of living, including expensive property prices, can be a hurdle. Additionally, if you're looking for high rental yields, Oslo may not be the best choice, as rental yields are relatively low.

The city's property market also comes with specific complexities, such as various rules and regulations that may be unfamiliar to foreigners, including "Borettslag" rules and "Festetomt" properties.

In summary, buying property in Oslo is a worthwhile endeavor for those seeking long-term stability and are financially prepared for the high upfront costs. Still, it may not be the best choice for those looking for quick returns or short-term stays due to the high costs and relatively low rental yields. Thorough research and consultation with local experts are crucial before making a decision.

Make sure you understand the real estate market in Oslo

Don't rush into buying the wrong property in Norway. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.