Norway

Cost of Living in Norway?

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Cost of Living in Norway

Norway is infamous for being one of the most expensive places in Europe. So what sort of costs can expats moving to this country expect? The InterNations Expat Guide on the cost of living in Norway gives you a first insight into the expenses of typical budget items, from rent to transportation.
Expats can expect to spend a lot of Kroner on their cost of living in Norway.

At a Glance:

  • Norway is justifiably recognized as an expensive place to live as an expat, featuring high taxes on income and general items, and ever-increasing rents.
  • The property market in Norway is both competitive and costly, especially in big cities and the center of Oslo, as more and more people are flocking to Norway’s urban hubs.
  • Groceries, alcohol and tobacco are some basic items for which expats need to be prepared to pay significantly more. Budget supermarkets are, however, popular and can be a sensible option.

Norway in general and its capital Oslo in particular are well known for being very expensive. The 2015 cost of living survey conducted by the Economist Intelligence Unit ranks Oslo as the third-most expensive city for expatriates, based on a comparison of 160 products and services in each city. Though it isn’t just Norway’s capital city that has high living costs: a similar study by ECA International in 2014 named Stavanger as the fourth-most expensive city for expats, behind Oslo in third place. The overall high cost of living in Norway is very much due to taxes, from high income taxes to a standard VAT rate of 25%.

However, the services (such as the public health system) paid for by these taxes, as well as the comparatively high average incomes, somewhat make up for the cost of living in Norway. While Norway thus enjoys quite an excellent standard of living, this makes it doubly important for expats to carefully look at their future budget (and maybe negotiate additional expat benefits) in order not to suffer from the high cost of living in Norway. In the following guide, you can find an overview of the most common budget items and their costs.

Paying Your Rent and Buying Property

When it comes to rent and property prices, expenses vary depending on location, condition, size, utilities included, and so on. In 2016, rents in the capital Oslo and its suburban municipality Bærum were the most expensive in the country with mean monthly rental expenses of around 7,740 NOK for a one-bedroom apartment.

However, note that this is only an average! Particularly in the city center, a small three-bedroom apartment can set you back far more than the 12,880 NOK average monthly rent in Oslo and Bærum. Other areas where you have to be prepared for the high cost of living in Norway in regard to rent are Trondheim (avg. 2820/m² NOK), Bergen (avg. 2750/m² NOK), and Stavanger (avg. 1860/m² NOK), with figures based on annual rent per square meter for one room.

 In addition to rental expenses, you will also have to factor in a deposit (maximum six months’ rent) into your costs, as well as expenditures for utilities and additional services such as a telephone and internet connection, to which we will come back later. According to a 2012 housing consumption study, Norwegian households usually spend 31% of their total annual expenditures on housing and utilities, regardless of the city in which they are living. It is likely that current expenditure varies from this figure due to changing economic circumstances.

Buying property does not come much cheaper, either. The majority of Norwegians (77%) are home owners, and this preference for buying real estate is one reason for steadily rising property costs, which play their part in the high cost of living in Norway.

In Norway around half of residential buildings are detached houses, which can be extremely expensive — as of 2016, the national average asking price for one square meter of a new detached house was 33,584 NOK. Again, Oslo is even more expensive, with prices for one square meter of an apartment in the city center averaging around 79,000 NOK.

Plus, buyers also have to cover some of the expenses connected to the purchase, such as a 2.5% stamp duty, as well as any property tax imposed by the local municipality. Real estate agent fees (usually 1–2.5% plus VAT), on the other hand, are typically taken care of by the seller. 

Utility Costs

Expenditures for utilities such as electricity, water, and gas have somewhat leveled out in recent years; however, they still contribute their fair share to the cost of living in Norway. Heating and (hot) water may already be included in your rent, so make sure to check for this.

With electricity usually used for heating, you might also have to prepare yourself for a potentially hefty electricity bill at the end of the winter. In the first quarter of 2017, prices for one kWh were around 0.95 NOK, including taxes and expenses for grid usage. As such, basic utility costs for an 85m² apartment can easily add up to around 1,200–2,000 NOK a month. 

Calling Your Friends and Watching TV

In 2012, an average of 1.9% of the yearly expenditures was spent on communication in Norwegian households. Across Norway the level of broadband coverage sits at 95%, and just over 91% of households have PCs. Of the internet users in Norway, 80% own a smartphone, making Norway one of the largest technology markets in Europe.

Well-known providers of services such as broadband internet connections, cell phone contracts, telephone landlines, as well as even television, are for example Telenor, Telia, and NextGenTel. Prices, of course, vary depending on provider, availability, and the services provided, so make sure to shop around and get the deal that suits your needs best.

You can, for example, get a basic internet connection with a speed of 10 Mbit/s for around 300 NOK a month. For 199 NOK, you can get a basic cell phone contract for one month with free domestic calls, MMS, and 1GB of data.

According to Norwegian law, every house must have a phone cable, with most households opting for a Telenor fixed-line service. Prices for phone calls between fixed lines are relatively cheap, and standard cable options include ADSL or fiber optic.

Alternatively, you might be able to save money by getting all (or at least most) of your communication and television services from one single provider in a package deal. Check with local providers to find out if they offer package deals in your area.

Regardless of how you are getting your television services, keep in mind that your cost of living in Norway will also include a broadcasting license fee, the so-called ‘Kringkastingsavgiften’. This television fee is regularly set by Parliament, and the 2017 fee amounts to 2,867.70 NOK, including VAT at 10%.

 

We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete. 

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