Same situation in Norway. But the tax incentives are so many that if you can you should buy, from an economic perspective. of course there is risks. And if mobility / freedom is weighing more than money, maybe you shouldn't buy?
Also, most europeans tend to settle down, and not move across the continent every few years, so buying instead of renting makes even more sense, since you'll be staying in that house probably for the rest of your life.
Private housing is both a basic human need, and the largest asset class. Private speculation in private property is massive in scandinavian countries. It is hard to see speculation going away without unpopular state regulations on the housing market.
For first time buyers of housing in norway, family background has become the most important factor.
The housing market is quite competitive in Norway's bigger cities. Oslo in particular is crazy and expensive; as a student you basically can't afford your own flat, and almost everyone ends up sharing with several other people. I don't know what the situation is like in Sweden and Denmark at the moment.
As a foreigner here in Sweden I've heard about this mystical bubble which will burst sometime soon causing morgage rates to skyrocket. If I was going to buy something, say in North Stockholm, how long would you recommend waiting?
but the article is per household, so you should slash your prices by half since household usually consist of two people, so it seems Norway has extremely cheap properties
I don't know about the other countries, but "most" Norwegians are house owners (and therefore have pretty large debts, up to 6x their yearly income).
The government offers heavy incentives that promote owning a house/apartment, making renting long term a pretty bad economic option. If you plan to live somewhere for more than 2-3 years it's cheaper to own than to rent.
See, you've obviously put significant thought into this, even to the point of building a model. Most people I know, they buy a place because they need a place to live. They also tell themselves that buying a place is a great way to grow your capital. They may be right, but when asked "where are you going to live, once you've sold?" most people I know have terrible answers. Most people I know answer "I'll just buy a new place."
The reality is that most people I know would rather rent – it's easier and in many cases even cheaper here. But the problem is that here is Stockholm, and Stockholm has a highly dysfunctional rental market where it's practically impossible for anyone to just come on to the market and find a place to rent within a week or two. You're more or less forced into buying a place if you're going to stick around. People that stick around for a couple of weeks, maybe a month, are going to be fine – plenty of hotels and such make it easy to stay. But if you're staying for more than a month, but probably less than say three years – you're more or less SOL. There's a sort of secondary (and even tertiary, believe it or not) rental market, but you'll probably be moving around every few months whether you like it or not.
I can't help but think the chips are stacked against those who just need a place to live for a while, here in Stockholm at least.
Here in Norway, a big issue in the smaller districts and towns have been that people are moving to the bigger cities[1].
The result is a lot of empty houses.
Still, it can be difficult to find a home in these places for those who go against the flow, because those who leave (or inherit) often keep the house as a vacation home[2][3].
On a related note, since so few move to these places, the prices are quite low, so building a new house results in a significant loss from the get-go[4]. This means it can be difficult to get a sufficient loan to start building.
I recently sold my appartment in central Stockholm, I am reinvesting my money in stocks and renting for 1-2 years before hopefully entering a more healthy housing market. Of course it is all a gamble, but most people I talk to recommend waiting +1,5 years, if you can.
The thing about Copenhagen property (and I expect this is true for all the Nordic countries) is that is closed to foreign investors - you can only buy if you're a permanent resident, and even if you come from EU, you can get the status after 5 years of living there. So not an easy market to get into as a buyer, but it helps having sane prices for locals, which IMHO is the way to go.
The trend here in Trondheim (third-largest city in Norway with 200k residents, of these ca. 40k are students) is that a lot of houses and apartments are explicitly offered for sale with plans for conversion to student apartments.
Rents in the city have increased by 8.2% over the last 12 months, property prices by 20-25% over the last two years. The price per square meter to buy anything reasonable is above 6k Eur now. Salaries are, of course, not adjusted to compensate for this...
So I can understand and support this Dutch initiative, but of course universities and municipalities then have to ensure they provide an appropriate amount student accommodation. Since students are an important economic factor, this doesn't sound to be a too unreasonable demany to me.
The Norwegian government also tries a different approach - it tries to enable young people to buy property already in their twenties by funding special discounts on interest rates. Together with banning investors from the cities, this might also be a model for the Netherlands, which, like Norway, has quite a high rate of home ownership (69% NL vs. 81% NO). Some of my recent master students owned an apartment here and made a nice profit when they sold it this year and moved back to Oslo...
Unless you have a crazy amount of money to burn I'd suggest that you buy both with a mortgage (assuming you have the income to do so) and then rent the one you're not living in. It's pretty common for Scandinavians to have a place in Spain or Portugal or as far as I'm aware for Americans to have a regular winter holiday in Central America. This is on the assumption that you think that both properties might appreciate over time, so even if you don't pay down the mortgage much your will still make money.
I’m from southern Poland, flats are dirty cheap here. I bought one for 35k euro 4 years ago.
However, we are about to become expats in one month so I kind of think of selling now (few reasons, government taxes, house prices went up). I think that renting is way better in a long run (unless you plan to live in one city for more than 10+ years). As for buying, maybe some small house in my 50s in some less populated area like mountains or forest :)
Currently I'm unsure where I will/want to settle down.
I also manage to save some money monthly, which I invest in diverse markets. So my thinking is that at there isn't (or "shouldn't be") any rush for me to buy property.
But news like this obviously goes against that and will have me revisit the idea.
So it's about the same as buying a plot of land (where you usally need to build something within a period of time).
€1 for a plot of land isn't terrible either.
There used to be seaside plots for €1 in northern Sweden, with the caveat that you need to live there permanently for 5 years.
reply