Is it still worth buying a rental property in Oslo?

See what went wrong for property buyers in Oslo

Why are people questioning Oslo rental property right now?

Buying a rental property in Oslo still makes sense in some cases, but the average deal currently looks much worse than the strength of the rental market suggests.

The strange part is that tenants are paying considerably more while many landlords are still leaving. Eiendom Norge's latest rental-market figures show Oslo rents rising 3.6% in the second quarter and 4.7% over four quarters. Across Norway's four largest cities, rents have climbed roughly 32% since early 2022.

At the same time, Norges Eiendomsmeglerforbund's latest analysis with Ambita and Samfunnsøkonomisk Analyse found that roughly one in five Oslo investor homes has disappeared since 2019. Its earlier count showed 11,570 fewer privately owned secondary homes and another 4,864 fewer homes owned through companies.

Those landlords have been dealing with mortgage rates above 5%, higher operating costs and unfavorable wealth-tax treatment. Meanwhile, Oslo home prices have barely moved this year. Eiendom Norge's latest housing numbers put Oslo at just 0.3% growth so far, the weakest result among the markets it tracks.

So Oslo has a rental market with genuine scarcity and ownership economics that are still awkward. Whether a rental property works depends much more on the price paid, leverage and neighborhood than on the simple fact that rents are going up.

What is happening in Oslo?	Latest evidence	Effect on a new landlord	Our read
Oslo rents	+3.6% in Q2	Positive	Tenant demand remains strong
Oslo rents over four quarters	+4.7%	Positive	Growth has lasted beyond one quarter
New mortgage rate	5.29%	Negative	Debt remains expensive
Oslo home prices this year	+0.3%	Mixed	Buyers are getting little help from appreciation
Investor-owned housing since 2019	Roughly one-fifth gone	Mixed	Less rental competition, but landlords have clearly struggled

Are Oslo rents high enough to make rental property profitable again?

Oslo rents are high today, but the average apartment still produces a pretty thin return relative to what the property costs.

Statistics Norway's latest Rental Market Survey puts the average two-room rent in Oslo and Bærum at NOK 15,260 a month. That is NOK 183,120 a year. The same dataset works out to approximately NOK 4,060 of annual rent per square metre.

Oslo municipality's latest full-year transaction data put the average block apartment at NOK 100,900 per square metre.

Put those figures together and we get a rough gross yield of 4.0%.

That 4.0% comes before common charges, maintenance, insurance, empty periods, repairs and tax. Financing also sits outside the calculation.

With new Norwegian home loans currently averaging 5.29%, the mismatch is pretty blunt. An investor buying an ordinary Oslo apartment with substantial debt can pay more in interest than the property produces in gross rent.

A 4% yield means something very different today than it did during the era of extremely cheap mortgages. For a cash buyer, it may be acceptable alongside long-term appreciation. For a heavily leveraged buyer looking for monthly income, it is usually weak.

Are Oslo rents finally rising faster than apartment prices?

Yes. Oslo rents are currently beating apartment prices by a wide margin, and that is slowly making the rental-property calculation less bad.

Eiendom Norge says rents across the large cities have increased roughly 32% since early 2022, compared with consumer-price growth of a little over 20% during the same broad period. Oslo rents alone are up 4.7% over the latest four quarters.

Oslo property prices have followed a very different path lately. Despite a strong housing market nationally, Eiendom Norge reports just 0.3% price growth in Oslo so far this year. The national figure is 4.9%.

That gap is worth watching. Oslo has historically been a market where expectations about future appreciation quickly feed back into purchase prices. Lately, rent has been doing more of the catching up.

Consider a NOK 5 million apartment rented for NOK 15,000 a month. The gross yield is 3.6%. If the apartment price stays flat while the rent eventually reaches NOK 16,500, the yield rises to almost 4.0%. Nothing needs to happen to the property's valuation for the income economics to improve.

We are seeing the beginnings of that adjustment. It has further to go before the average Oslo apartment becomes a strong income property, but the direction is much more favorable to landlords than a few years ago.

Why are Oslo landlords selling when rents keep going up?

Oslo landlords are selling because today's high rents still do not compensate many owners for expensive debt, taxes and operating costs.

The scale of the exit is much larger than a handful of accidental landlords cashing out. Norges Eiendomsmeglerforbund's latest analysis says around one in five investor homes has disappeared from Oslo since 2019.

An earlier breakdown counted 11,570 fewer privately owned secondary homes and 4,864 fewer homes owned through companies. The decline among privately owned secondary properties became even steeper during 2025.

If rising rents automatically made residential letting lucrative, thousands of landlords would not be heading for the exit at the same time. That is one of the clearest reality checks in the Oslo rental debate.

Those sales also change the market for whoever remains. An investor apartment sold to an owner-occupier remains part of Oslo's housing stock, yet it disappears from the rental stock. More homes become available to buyers while tenants compete over fewer rentals.

The landlord exodus cuts both ways: it shows how difficult the economics have been, while also helping create the rental scarcity that could improve the economics later.

How badly do today's mortgage rates hurt an Oslo rental property?

Mortgage rates currently make high-leverage Oslo rental property very hard to justify on cash flow alone.

Statistics Norway's latest monthly figures put the average interest rate on new residential mortgages at 5.29%. The rate actually increased slightly from the previous month rather than continuing down.

Take a NOK 5 million apartment collecting NOK 180,000 a year in rent. At 70% leverage, the mortgage is NOK 3.5 million.

Interest at 5.29% comes to roughly NOK 185,000 a year.

The rent has already been used up before paying common charges, maintenance, insurance or allowing for a single vacant week. Principal repayments put additional pressure on monthly cash flow, although they build equity rather than represent an economic expense in the same way as interest.

At 50% leverage, the picture changes. NOK 2.5 million of debt costs around NOK 132,000 in annual interest, leaving roughly NOK 48,000 of rent before the other expenses.

The property has not changed. Only the buyer's financing has. Right now, that difference is huge.

NOK 5m apartment	40% debt	50% debt	60% debt	70% debt
Mortgage	NOK 2.0m	NOK 2.5m	NOK 3.0m	NOK 3.5m
Interest at 5.29%	NOK 105,800	NOK 132,250	NOK 158,700	NOK 185,150
Example annual rent	NOK 180,000	NOK 180,000	NOK 180,000	NOK 180,000
Rent left after interest	NOK 74,200	NOK 47,750	NOK 21,300	-NOK 5,150
Before operating costs	Reasonable	Thin	Very thin	Already negative

Should we buy an Oslo rental property now and wait for interest rates to fall?

We would not buy a weak Oslo rental property today purely because mortgage rates might fall later.

The temptation is understandable. A one-percentage-point drop in the borrowing rate saves NOK 30,000 a year on a NOK 3 million mortgage. Economically, that is similar to increasing the rent by NOK 2,500 every month.

A few rate cuts could therefore transform plenty of marginal Oslo investments.

The problem is timing. New mortgage rates recently moved up to 5.29%, and inflation has remained sticky enough that Norges Bank has kept monetary policy restrictive. There is no safe basis for assuming that cheap money is about to return quickly.

Lower rates should be upside rather than a condition for survival. If an apartment works reasonably well at today's borrowing cost, future cuts could make it attractive. If the owner needs a large rate decline simply to stop losing cash every month, the purchase price is probably too high.

Where in Oslo do rental yields actually look good today?

The better Oslo rental yields are currently found outside the expensive central districts, because purchase prices fall far more than rents do as we move outward.

Statistics Norway estimates the monthly rent of a standardized 50 m² two-room apartment at around NOK 16,700 across Sentrum, Frogner, Ullern and St. Hanshaugen.

For Søndre Nordstrand, Grorud, Stovner and Alna, the equivalent figure is about NOK 14,500.

That is only a 15% difference in rent.

Purchase prices tell a completely different story. Oslo municipality's latest block-apartment figures put Frogner at NOK 124,700 per square metre and St. Hanshaugen at NOK 118,300. Alna is NOK 69,900, Grorud NOK 67,300, Stovner NOK 58,600 and Søndre Nordstrand NOK 55,000.

Tenants do not pay anything close to twice as much to live in Frogner, although a buyer can easily pay around twice as much per square metre there.

Using the standardized rents and municipal transaction prices gives us a rough gross yield of only around 3.5% for the expensive central-western group. The outer-eastern group lands closer to 5.5%.

These are broad estimates rather than valuations of specific apartments. Housing quality, exact location and unit mix differ between districts. Still, the gap is much too large to dismiss.

For a landlord focused on income, a well-connected apartment around Grorud, Stovner, Alna or Søndre Nordstrand can make more sense than paying a huge premium for a prestigious postcode. We would care far more about walking distance to a metro station, common charges and tenant demand than whether the apartment sits in one of Oslo's fashionable neighborhoods.

Oslo area	Approx. 50 m² purchase value	Standardized monthly rent	Rough gross yield	What we see
Expensive central/west	NOK 5.77m	NOK 16,700	~3.5%	Great location, poor income
Inner-city districts	NOK 5.30m	NOK 16,300	~3.7%	Rent does not justify the price easily
Bjerke/Østensjø/Nordstrand group	NOK 4.17m	NOK 15,200	~4.4%	Much more workable
Outer east	NOK 3.14m	NOK 14,500	~5.5%	Best broad yield mathematics

Are small Oslo apartments still the best rentals to buy?

Small Oslo apartments still earn much more rent per square metre, although a tiny apartment is not automatically a good investment.

Statistics Norway's latest Oslo and Bærum figures show the pattern clearly. One-room homes generate around NOK 5,270 in annual rent per square metre. Two-room homes produce NOK 4,060, three-room homes NOK 3,640, four-room homes NOK 3,410 and homes with five rooms or more NOK 2,740.

The smaller the property gets, the more tenants generally pay for each square metre.

There is an obvious catch: buyers know this. Small Oslo apartments often sell at high prices per square metre, so part of the rental advantage is already reflected in the purchase price.

We would rather buy a compact apartment with an efficient layout than blindly chase the smallest floor plan available. A real bedroom, usable living space, good public transport and sensible common charges can produce a better investment than an awkward studio that looks attractive only when rent is divided by floor area.

Apartment size	Annual rent per m² in Oslo and Bærum	Rental efficiency
1 room	NOK 5,270	Very high
2 rooms	NOK 4,060	High
3 rooms	NOK 3,640	Moderate
4 rooms	NOK 3,410	Lower
5+ rooms	NOK 2,740	Low

Is Oslo actually running out of rental homes?

Oslo's rental supply is genuinely getting tighter, and current construction numbers do not suggest a quick replacement of the homes investors are selling.

The clearest evidence comes from the investor stock itself. As seen above, Norges Eiendomsmeglerforbund estimates that roughly one-fifth of Oslo investor homes has disappeared since 2019.

New construction is not filling that hole quickly. Oslo's Plan and Building Agency granted start permits for 558 homes in the first quarter, down from 844 a year earlier. The second quarter brought another 617, again below the previous year's 774.

Across the first half, that gives us 1,175 permitted starts versus 1,618 in the same two quarters a year earlier, a decline of roughly 27%.

The completion picture briefly looks healthier. Oslo issued 647 use permits in the second quarter, almost three times the 222 recorded a year earlier. But the municipality says much of the increase came from apartment projects and student housing that were already moving through the pipeline, while activity among other developers remains low.

Looking further back makes today's weakness easier to understand. Oslo granted start permits for 6,493 homes in 2017. By 2024, the annual number had fallen to 2,332.

There are plenty of homes sitting in Oslo's planning reserve, so the city has not literally run out of sites. The bottleneck is getting projects to make financial sense and then actually building them.

For landlords, the practical point is simple: new rental competition is unlikely to arrive quickly enough to undo the current scarcity.

Oslo housing supply	Earlier level	Latest level	Direction
Q1 start permits	844 one year earlier	558	Down 34%
Q2 start permits	774 one year earlier	617	Down 20%
H1 start permits	1,618 one year earlier	1,175	Down 27%
Annual start permits	6,493 in 2017	2,332 in 2024	Far below the previous peak
Q2 use permits	222 one year earlier	647	Up sharply, helped by projects already in the pipeline

Could Oslo suddenly build enough apartments to push rents down?

A large enough building boom to crush Oslo rents looks unlikely in the near term.

The city does have a substantial planning reserve, including tens of thousands of homes in detailed and area plans. That can make it look as though a wave of new supply is waiting around the corner.

But a planned apartment does not house anyone.

Financing costs, construction costs and developers' required returns still determine whether those projects start. The latest Oslo permit numbers remain weak, and the Plan and Building Agency itself says activity among ordinary developers is still low.

The national construction data point in the same direction. Statistics Norway counted 19,498 completed homes across Norway last year, the lowest annual total since 2010. Start permits improved to 20,184, but they remained far below the levels seen before the sharp housing slowdown that began in 2023.

We would worry more about local supply than an Oslo-wide glut. An apartment can face real rent competition if several hundred new homes complete around the same metro station, even while the city as a whole stays undersupplied.

Checking what is being built within walking distance of a potential rental is therefore more useful than staring at Oslo's total planning reserve.

How much do Norwegian taxes hurt an Oslo rental property?

Norwegian tax rules can take a large bite out of an Oslo rental property's return, especially for an investor who already has significant net wealth.

Rental profit is normally taxed at 22%. Owners can generally deduct relevant costs such as maintenance, insurance and common expenses when calculating taxable rental profit.

The bigger problem for some investors is wealth tax.

The Norwegian Tax Administration currently values a secondary home at 100% of its calculated or documented market value for wealth-tax purposes. A primary residence receives much more favorable treatment, with only 25% of the housing value counted up to NOK 14 million.

For the current tax year, net wealth tax starts above NOK 1.9 million for an individual and NOK 3.8 million for couples assessed together.

That distinction changes the economics depending on who buys the apartment. A leveraged investor may have enough debt to offset much of the taxable wealth. Someone who already owns substantial assets and buys a rental largely with cash can feel the wealth-tax burden much more directly.

Oslo's municipal property tax is less important for most ordinary apartments. The residential rate has been cut to 1.7 per thousand and the basic deduction increased to NOK 4.9 million per independent residential unit. For many mid-priced apartments, the resulting bill is small compared with mortgage interest or wealth tax.

When we model an Oslo rental today, wealth tax deserves much more attention than the municipal property-tax line.

Tax issue	Current treatment	Effect on the investment
Rental profit	Normally taxed at 22%	Reduces net income
Secondary-home wealth valuation	100%	Can be expensive for wealthy owners
Primary-home valuation	25% up to NOK 14m	Shows how large the secondary-home disadvantage is
Wealth-tax threshold	NOK 1.9m single / NOK 3.8m jointly assessed	Investor-specific impact
Deductible rental expenses	Many normal operating expenses qualify	Softens the tax burden
Oslo property tax	Low rate with NOK 4.9m basic deduction	Usually a smaller concern

Can an Oslo landlord just raise the rent when market rents jump?

No. An existing Oslo landlord cannot immediately push every tenancy up to today's asking rent just because new listings have become more expensive.

Norwegian tenancy rules limit how quickly an occupied apartment can be repriced.

Ordinary annual rent increases are tied to changes in the consumer price index and require advance notice. Moving an existing tenancy toward the prevailing rent for comparable properties follows a slower process and generally requires the tenancy to have lasted at least two years and six months under the relevant conditions.

Statistics Norway's rent data show how large the resulting gap can become. Newer contracts in Oslo and Bærum command substantially more rent than old ones. Contracts entered into within the latest one or two years were roughly 13% more expensive than agreements from 2019–2023 and around 30% more expensive than contracts dating from before 2019.

For someone buying an apartment, the existing tenancy therefore matters enormously. A vacant apartment that can immediately be offered at today's rent is a different investment from a property inherited with a long-running tenant far below the current market level.

That detail can easily be worth more than negotiating another NOK 100,000 off the purchase price.

Do buying costs make an Oslo rental property a bad short-term investment?

Yes. Oslo rental property makes much more sense with a long holding period than as a three-year trade.

For ordinary freehold real estate, Norway charges document duty of 2.5% when ownership is transferred.

On a NOK 6 million apartment, that is NOK 150,000 immediately.

Suppose the apartment then rises 5%, producing a NOK 300,000 paper gain. The purchase duty alone has already consumed half of that increase before brokerage costs on the eventual sale, financing fees, renovation or tax are considered.

Housing-cooperative apartments, or borettslag units, have an advantage here because transfers of cooperative shares do not trigger the same document duty.

But the word “borettslag” should never be treated as a free lunch. The investor has to check the cooperative's rules on letting, common debt, common charges and upcoming maintenance. Cheap transaction costs can be wiped out surprisingly quickly by a weak balance sheet inside the cooperative.

For a rental investor, we would normally want enough time for rent growth, debt repayment and potential price appreciation to overwhelm the transaction friction. Five years is much more comfortable than two or three; ten years gives the thesis considerably more room.

Does buying an Oslo rental through a company fix the tax problem?

Buying an Oslo rental through a company can make sense for someone building a real portfolio, but it does not magically turn a mediocre apartment into a good investment.

Direct secondary homes are harshly treated for wealth tax because 100% of their calculated value is included. Shares receive a valuation discount, which can make a corporate structure interesting in some circumstances.

The trade-off appears when profits eventually leave the company.

Corporate profit is taxed at 22%, and dividends distributed to an individual face another layer of tax. For an investor who plans to keep profits inside the company and reinvest them in more properties, delaying that personal distribution can be useful.

For someone buying one apartment and using the rental income for everyday spending, the case is far less compelling.

There are also administrative costs, accounting and financing differences to consider. Banks may treat company borrowing differently from an ordinary residential mortgage, so a tax advantage on one side can be lost through more expensive financing on the other.

We would decide the ownership structure after finding an apartment with good economics. Corporate packaging cannot repair a 3.2% gross yield bought at an inflated price.

What would make an Oslo rental property a genuinely good buy today?

A genuinely good Oslo rental property today should produce roughly a 5% gross yield, have manageable common charges and work without assuming that mortgage rates or house prices will save the deal later.

That immediately narrows the search.

Central Oslo properties yielding around 3.5% are difficult to make attractive with today's financing. Once gross yields move toward 5%, moderate leverage becomes much easier to carry.

The location still has to work. We would favor an ordinary one- or two-bedroom apartment near a metro, train or major bus route, where the tenant pool includes singles, couples and young professionals rather than one very specific type of renter.

Common charges deserve almost as much attention as the purchase price. Two apartments can both yield 5% gross, but NOK 5,000 of monthly common costs will quickly separate the good one from the bad one.

We would also inspect the building's maintenance plan, cooperative debt where relevant, upcoming façade or roof work and the amount of competing housing being completed nearby.

Finally, the deal should survive some bad luck. One vacant month, an appliance replacement or another year of mortgage rates around current levels should be annoying rather than catastrophic.

What we would look for	Strong	Borderline	Weak
Gross yield	Around 5%+	4–5%	Below 4%
Leverage	Low to moderate	Around 60%	70%+ on a low-yield unit
Common charges	Low	Average	High
Public transport	Very good	Acceptable	Poor
Tenant pool	Broad	Somewhat narrow	Niche
Cash flow at today's rates	Works	Barely works	Needs rate cuts
Holding period	7–10+ years	Around 5 years	Short

Is it still worth buying a rental property in Oslo?

Yes, selectively. Oslo rental property is becoming more interesting again, but we would avoid the typical highly leveraged central apartment and focus on properties where the rent already makes sense today.

The average numbers still look mediocre. A rough citywide gross yield around 4% sits below new mortgage rates of 5.29%. For an investor borrowing 60% or 70% of the purchase price, interest can swallow most or all of the rent before operating expenses appear.

Taxes reinforce that problem, particularly for investors exposed to wealth tax.

But the market underneath those weak averages is changing. Oslo rents are rising much faster than Oslo home prices, rental supply has contracted sharply and housing construction remains subdued. Those three forces are gradually repairing rental yields.

Geography changes the answer dramatically. Our rough comparison between Statistics Norway's standardized rents and Oslo municipality's district prices moves from around 3.5% gross yield in expensive central-western areas toward roughly 5.5% in parts of outer eastern Oslo.

That gap is large enough to change the investment completely.

If we wanted maximum monthly cash flow with a large mortgage, Oslo still would not be our obvious choice. The purchase prices remain too high.

For someone with substantial equity, a long holding period and the patience to search district by district, the answer is different. A compact apartment near good public transport, bought around a 5% gross yield with sane common charges, can make sense without requiring heroic assumptions.

The interesting Oslo rental trade today is quite specific: buy income cheaply while other landlords are still selling, rather than paying a premium for the idea that Oslo property always goes up.

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INVESTROPA

A team researching how property purchases actually go wrong across Europe

We are a team of real estate researchers and local specialists focused on helping people avoid expensive mistakes when buying property abroad, particularly in Oslo. If you’d like to learn more about us, you can check our presentation page.