August 14, 2022

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Expect a sharp jump in rent for students in August

Expect a sharp jump in rent for students in August

housing shortage

Rent prices for dormitories and apartments will experience a sharp jump in the fall, after which price growth will return to normal. – Find housing outside the city center, says economics professor Ola Grytten to students struggling in the housing market.

It’s not just electricity and groceries that have risen in the last year. Housing rental costs are also on the rise, and for students, Ola Gretten, an economics professor at the Norwegian School of Economics, expects a sharp rise in prices in August.

Huge demand

The epidemic is over and students and migrant workers have returned to the cities. At the same time, there was little activity on the construction front. This leads to huge excess demand, says Gretten.

It is expected that prices will rise further when “everyone” obtains housing at the beginning of their studies.

There is a lot of demand and we will see a jump in prices in August. Then the situation calms down in September and October. After that, it will be interesting to see what happens after next year. I think we’ll see a jump in prices now, while the market calms down after that, at least somewhat, says Gretten.

Impossible for students

According to the economics professor, the previous government did not commit when it came to developing student housing. He believes that the current government is so new that it cannot take responsibility for the situation with insufficient student housing construction yet.

He believes that the students found themselves in a very difficult financial situation.

Accommodation costs are gradually rising so that it becomes impossible for a student to manage and support student loans. They only have 2,000 kroner left to live on, which doesn’t add up, says Gretten.

Big differences

Figures from hybel.no show relatively large differences in price trends in the rental market in Norway’s largest cities.

A room in a shared flat in Stavanger is up 9.5% in the past year and costs an average of 5,173 NOK per month on hybel.no. While the growth in Tromsø, for example, is 1.4% for the same type of housing. The price in Tromsø is 5,702 per month for a room in a shared apartment. Two-bedroom apartments in Stavanger are up 7.1% and cost NOK 9,665 per month. Bergen recorded the lowest growth rate for this type of apartment at 2.9 percent. There is a two-room apartment for 10,422 NOK.

Plus 3.9% in Oslo

For student housing owned by student associations, the price increase also varies. The Students’ Union of Western Norway reports that they have raised their housing prices by 1.9 per cent. The Students’ Union in Oslo announced a 3.9 percent increase in prices from August.

NRK writes that the Student Association of Ostfold is raising its housing prices by 4.5%.

can’t enjoy

Gretten also points to the fact that many students like to live downtown on a large university campus.

– They want to live in a place so expensive that they cannot enjoy life there, he says.

The economics professor believes that more people should think differently about where they choose to find housing during their studies.

– More people have to find housing outside the city center. I only see here in Bergen, where I live and work, that it’s significantly cheaper to live once you’re out of the city centre, he says.

will flatten

In the long run, he also believes that strong demand with subsequent price growth will also lead to more owners joining.

– I think that the supply of rental housing will increase over time. At the same time, you will not get new jumps in demand. This contributes to lower price growth over time, says Gretten.

An additional explanation for the increased demand for rented housing is the influx of refugees from Ukraine.

It is clear that the influx of refugees from Ukraine leads to increased demand in the rental market, says Ola Grytten.

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