Building more houses and blocks won’t solve the housing crisis

Grünerløkka, Grønland, Tøyen and Ekeberg in OsloGrünerløkka, Grønland, Tøyen and Ekeberg in Oslo. Foto: Håkon Mosvold Larsen / NTB scanpix

It is not possible to solve  the housing crisis by building more houses and blocks as long as interest rates are low,  the Chief Economist in Norsk Familieøkonomi says to the newspaper Dagsavisen.

In Oslo  housing prices have increased by 12.8 percent in the past year .

Reid KrohnPettersen in Norsk Familieøkonomi says to dagsavisen that housing prices will continue to rise, not least in Oslo, even if more buildings are built.
Many of the new dwellings and residences will be bought by 50-year-olds without any debts and with millions available for buying apartments and houses, he thinks.
They get a much better return on their money by buying dwellings and residences they can rent out,than by keeping all their money in the bank, when the interest rates are as low as they are now. In Oslo will be close to a third of the housing sold to speculators. There are also many rich moms and dads who buy apartments or other housing for their children, “ KrohnPettersen says.
Nationwide there are about 300,000 secondary dwellings and residences, dwellings and residences that are owned by others than those who live in them, according to earlier estimates. The latest figures for Oslo, which is for 2014, shows that there are 61.525  secondary dwellings and residences in the capital , the Tax Agency informs the newspaper.
As of now, speculators can have their cake and eat it , since housing prices continue to rise and they also can earn  good money on renting out apartments and other kinds of housing. The Chief Economist og Norsk Familieøkonomi thinks that in the current situation, measures that makes it less profitable for speculators to buy secondary dwellings and residences  are neccessary to bring about a change in the situation.
If we really want to help the young in the housing market, we need to tax secondary dwellings and residences. The tax for these dwellings will have to be twice as high for it to get the desired effect, the Chief Economist says.
Source: NTB scanpix / Norway Today

2 Comments on "Building more houses and blocks won’t solve the housing crisis"

  1. Ajibade Thompson | 4. June 2016 at 17:01 | Reply

    Iam interested in living in Norway bcos I am an expert builder’s which I believed I can display my talent for the development of the country

  2. I didn’t realize this was such a problem in Oslo. Insightful article, thanks for sharing!

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