Housing Crisis Strikes Students and Low-Income Groups in Norway

– Norwegian Association of Real Estate Agents (NEF) reported that increasing demand by the students for private housing and the decreasing number of new buildings will lead to further inflation in the housing market.

The lack of student housing leads the vast majority of students into the private housing market. According to the estimation of NEF, 86 percent of students must find accommodation in the private housing market especially in major cities like Oslo.

On the other hand, the agents reported that fewer houses were built in the first half of 2012 compared to the same period last year. Throughout 2011, less than 28,000 homes were built, and experts argued that the figure needed to have been up to 40 000 if they were going to take away the pressure in the housing market.

So, the authorities are concerned that this in-balance between the demand and supply will lead to abrupt increases in housing prices in Oslo, Bergen, Stavanger and Trondheim.

The most fragile groups affected by this situation are students and low-income groups, according to the report. According to the latest figures from SSB, house prices increased on average by 3.2 per cent from the first to the second quarter of 2012.

Prices for flats in blocks and row houses have already increased up to 3.9 per cent respectively from the first to the second quarter of 2012. The abrupt demand by 12,000 new university students who could not be offered student housing has also increased the pressure on the housing market by leaving lower income groups more affected than higher income groups.

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