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Yes, the analysis of Tromsø's property market is included in our pack
Thinking of buying a property in Tromsø? You're not alone!
Many people are interested in Tromsø's beautiful Arctic scenery and dream of owning a cozy cabin or a stylish apartment in the city.
Still, would it be a smart investment? Are property prices increasing in Tromsø? Is it expensive? Is it better to invest in the city center or near the fjords? What are the taxes? Where are the best rental yields?
We have the answers.
The Investropa team has done their homework and know this market well. As a matter of fact, we have condensed all our findings in a pack. Get it now.
In the lines below, we will share some of this knowledge.
How is the real estate market in Tromsø?
Is the property market in a good shape or a challenging one? Data will tell us the story.
Types of properties
In Tromsø, there are various types of properties available for sale, catering to different preferences and needs.
These include cozy apartments perfect for individuals or couples, charming houses with yards ideal for families, and modern townhouses offering a balance between space and convenience.
Additionally, you can find picturesque cabins or cottages for those seeking a serene getaway amidst nature's beauty.
Whether you're looking for a city dwelling or a tranquil retreat, Tromsø offers a diverse range of properties to suit various lifestyles and aspirations.
Buying or renting?
(In case you want it for yourself, not for rental purposes)
If Tromsø is your city of choice, you may be pondering the buy vs. rent decision in this charming Norwegian city known for its stunning Arctic landscape.
Usually, buying is better than renting in Tromsø due to the relatively low interest rates and the potential for appreciation of property values.
Nevertheless, if flexibility is your main concern, renting is the recommended choice.
Property prices in Tromsø
On average, according to the last data from Eiendom Norge/Real Estate Norway, purchasing a property in Tromsø will cost you around $6,500 per square meter.
It's just an average. An apartment in Tromsø city center might have a different price per square meter than a house in Tromsdalen. You'll get a more detailed in our pack for buying property in Tromsø and in Norway.
To give you some context, it is 2.9 times less than the property prices in the center of New York.
Also, housing prices in Tromsø are 25% cheaper than in Oslo.
The most expensive neighbourhoods in Tromsø are probably Breivika and Sjøområdet, while the cheapest are likely Ølve, Løkta and Ytre Ringvei.
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.
It is something to have in mind when wondering whether it's a good investment to buy a property in Tromsø.
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 Tromsø it's a good thing because, as the economy grows, people's incomes (usually) increase, motivating them to invest in real estate, which causes a rise in property demand and prices.
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.
These are cues signaling that property prices in Tromsø might go up in 2024 and during the coming years.
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 Tromsø
It can be difficult to buy property in Tromsø due to the lack of reliable and updated information available. That's why we have created the pack to buy property in Tromsø and in Norway.
Buying process
In our pack, we've laid out all the steps involved in the buying process, including the required documents, taxes to be paid, and guidance on finding properties.
Now, we're giving you a more straightforward version to help you grasp the information more easily.
This is the step-by-step process to purchase a property in Tromsø:
- Determine your budget and property preferences, considering Tromsø's unique climate and location.
- Engage a local real estate agent familiar with the Tromsø market.
- Search for properties that meet your criteria, considering factors like proximity to Northern Lights viewpoints.
- Attend property viewings, paying attention to insulation, heating systems, and winter accessibility.
- Request specific documents like "Takst" (property valuation) and "Ferdigattest" (final building approval) to assess property value and legality.
- Obtain mortgage pre-approval from a Norwegian bank or financial institution.
- Submit a written offer through your agent, including any contingencies or conditions.
- Negotiate with the seller, considering Tromsø's market dynamics and seasonal price variations.
- Once the offer is accepted, sign a binding "Kjøpekontrakt" (purchase agreement) outlining terms and conditions.
- Conduct a thorough property survey and inspection to identify potential issues.
- Finalize the mortgage process, providing required documentation to the bank.
- Attend the property closing, pay the necessary fees, and register the property with the local authorities to complete the purchase in Tromsø.
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.
Make a profitable investment in Tromsø
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Where to find a property
Explore these websites to find properties in Tromsø:
- RE/MAX - A reputable real estate company operating in various regions across Europe, offering services for property buyers and sellers.
- Trulia - Providing neighborhood insights and real reviews to help you discover 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 you can get
As mentioned before, the average price per sqm in Tromsø is $6,500. A 1-bedroom property with a size of 60 square meters would cost approximately $390,000, and a 2-bedroom property with a size of 85 square meters would cost approximately $553,000.
However, as you can guess, property prices will differ based on the attributes of the property and its specific location.
Expect property prices to be on the higher side in the premium areas of Tromsø. A residence in Sentrum could cost you around $750,000, while an apartment in Skansen might be priced at $690,000.
Some locations are less expensive. You could locate a residence in Kroken for $640,000, or you may find an apartment in a remote area priced at only $100,000.
We give a more detailed breakdown in our full pack for buying property in Norway.
Mistakes to avoid
Here are the main pitfalls when buying a property in Tromsø, Norway:
- Strict property purchase regulations for non-residents.
- Potential ice and snow damage to roofs and foundations.
- Limited daylight hours in winter affecting property aesthetics and visibility.
- High heating costs due to the subarctic climate.
- Risk of permafrost affecting property stability.
- Limited accessibility during heavy snowfall.
- Northern Lights view obstruction from new constructions.
- Impact of changing government policies on property ownership for foreigners.
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 Tromsø
Life in Tromsø is a great mix of small-town charm, stunning natural scenery, and plenty of activities to enjoy all year round.
Cost of living
The cost of living in Tromsø is high compared to most other cities in Norway. Prices for groceries, restaurants, and housing are all above the national average.
Here are some examples to better understand the cost of living in Tromsø, Norway:
- A cup of traditional Norwegian hot chocolate (varm sjokolade) at a local café: $5-$7.
- Rent for a one-bedroom apartment in the scenic Tromsdalen neighborhood: $1,800-$2,800 per month.
- Monthly bus pass for the Tromsø public transportation system: $70-$100.
- A bottle of Arctic mineral water (e.g., Macks Isvann) at a grocery store: $2-$3.
- Utilities (electricity, heating, cooling) for an 85m² apartment in Tromsø: $150-$200.
- A bowl of hearty Norwegian fish stew (fiskesuppe) at a restaurant: $18-$25.
- Entrance fee to the Polaria Arctic Aquarium: $15-$20.
- Health insurance coverage for a family of four: $300-$500 per month.
Neighbourhoods
We like to make information easy to understand. So, we made a table that shows the different neighborhoods in Tromsø. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
Tromsdalen | Tromsdalen is a picturesque neighborhood nestled in the mountains, offering stunning views of the Tromsø Bridge and the Arctic Cathedral. | Scenic beauty, close to nature, and popular hiking trails. | Limited public transportation options and higher housing costs. |
Sentrum | Sentrum is the heart of Tromsø, featuring a vibrant city center with various shops, restaurants, and cultural attractions. | Abundance of amenities, cultural diversity, and excellent public transport. | Potentially noisy and crowded, higher crime rates compared to suburbs. |
Grunerløkka | Grunerløkka is a hip and trendy neighborhood, known for its lively street art, trendy cafes, and vintage shops. | Youthful atmosphere, artistic community, and unique shopping experiences. | Can be expensive, limited parking, and noise levels during weekends. |
Kroken | Kroken is a peaceful residential area with a mix of houses and apartments, providing a quiet living environment. | Tranquil setting, family-friendly, and proximity to schools and parks. | Limited nightlife and entertainment options, fewer shops and restaurants. |
Grønnåsen | Grønnåsen is a suburban neighborhood surrounded by greenery, offering a tranquil living space away from the city center. | Peaceful atmosphere, good schools, and ample outdoor recreation opportunities. | Longer commute to the city center, limited public transport during off-peak hours. |
Tromsøysund | Tromsøysund is a coastal neighborhood with beautiful waterfront views and access to recreational activities along the shore. | Scenic coastal living, water-based activities, and proximity to beaches. | Expensive real estate near the coast, potential weather-related challenges. |
Life in Tromsø
Tromsø is a major economic hub in Norway, with its largest sectors being tourism, fishing, and oil and gas. It is also home to a number of technology companies, and is a top destination for international business travelers.
What expats usually like the most in Tromsø is the midnight sun during the summer months and the spectacular Northern Lights during the winter. They also enjoy the many outdoor activities such as skiing, snowshoeing, and whale watching.
A good point for a property investor - Tromsø has a light rail system called Tromsø Metro which opened in 2014.
Tromsø has good access to healthcare, with many hospitals, clinics, and pharmacies available.
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Renting out in Tromsø
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 Tromsø
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 Tromsø which is quite different from the rest of the country.
If you decide to buy and rent out to long-term tenants, you should target students, young professionals, and families looking for larger apartments. Tromsø is also a popular tourist destination, so you may also want to consider short-term rental opportunities for visitors.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Sentrum | Students, professionals | City center, convenience | $1,200 - $2,500 |
House in Tromsdalen | Families, outdoor enthusiasts | Scenic views, space | $2,000 - $3,800 |
Apartment in Grønnegata | Young professionals, students | Central location, modern amenities | $1,000 - $2,000 |
Studio in Tromsøya | Single professionals, couples | Near water, nature | $1,100 - $1,800 |
Apartment in Kvaløya | Commute-friendly tenants | Easy access to city, nature | $900 - $1,600 |
House in Elverhøy | Families, professionals | Quiet suburb, schools | $1,800 - $3,000 |
Apartment in Breivika | Students, young professionals | Near university, amenities | $1,500 - $2,800 |
Rental yields
Nowadays, Tromsø offers some opportunities in terms of rental yields. Actually, you can easily achieve 7 or 8% due to the high demand for properties in the city relative to the limited supply.
Tromsø's highest rental yields are typically found in centrally-located apartments due to the high demand for rental housing in the city center. Additionally, properties located close to the university are also popular, as they attract a steady stream of students looking for housing.
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 Tromsø are taxed at 22%, which is not bad.
Short-term
You could also decide to rent short-term to students attending the University of Tromsø, or to tourists who are looking to experience the Northern Lights or other attractions in the area.
If you decide to go with that option, look for properties in the city center, particularly in the neighborhoods of Storgata, Nordre Rosten, and Breivika. Additionally, the waterfront areas of Strandtorget and Sjøgata are also popular rental spots.
Currently, there are approximately 1,820 active Airbnb listings in Tromsø, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $138.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Tromsø can make around $1700 per month. Also, the average occupancy rate is estimated at 63%.
Is it worth buying real estate in Tromsø then?
Buying a property in Tromsø can be a fantastic decision if you're in it for the long haul. Norway's stable economy, low interest rates, and the potential for property value appreciation make it an attractive investment.
Plus, Tromsø's unique blend of natural beauty, with the midnight sun and Northern Lights, offers a lifestyle that's hard to beat. If you're looking to rent out the property, the city's high demand for housing, especially in central areas and near the university, can provide a steady income stream. Just remember that property investments require time to grow, so this is a choice for those willing to commit for the long term.
On the flip side, buying property in Tromsø might not be the best idea if you're seeking quick returns or have a tight budget. The high cost of living, strict regulations for non-residents, and challenging subarctic climate can make it financially taxing.
Also, if you're not a fan of long winters, limited daylight, and potential disruptions from heavy snowfall, Tromsø's weather might not be your cup of tea. Moreover, be prepared for government policies on property ownership for foreigners to potentially change, which could affect your investment.
In essence, Tromsø offers a unique blend of investment potential and lifestyle, but it's not without its challenges and may not suit everyone's financial or personal circumstances.
Make sure you understand the real estate market in Tromsø
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.
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.