Norway at a Glance
Cost of Living in Norway
Norway in general and its capital Oslo in particular are well known for being very expensive. This is, for example, reflected in the cost of living surveys by both the Economist Intelligence Unit and ECA International. Both studies compare costs in more than 400 cities around the world and in both cases Oslo ranks as the third most expensive city for expatriates. The general 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 income 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 take a look at their future budget (and maybe negotiate additional expat benefits) in order not to despair at the high cost of living in Norway. In the following, you can find an overview of the most common budget items and their costs.
Paying Your Rent or Buying Property
When it comes to rent and property prices, expenses of course vary very much depending on location, condition, size, appliances included and so on. In 2013, rents in the capital Oslo and its suburban municipal Bærum were the most expensive in the country with mean monthly rental expenses of around 193 NOK per square meter. However, note that this is only an average! Particularly in the city center, a small two bedroom apartment can already set you back a monthly 12,000 NOK or more. Other areas where you have to be prepared for the high cost of living in Norway in regard to rent are Trondheim (avg. 168/m² NOK), Bergen (avg. 154/m² NOK), and Stavanger (avg. 160/m² NOK).
In addition to rental expenses, you will also have to factor in a deposit (around 2-3 months’ rent) in your cost of living in Norway, as well as of course expenditures for utilities and additional services such as a telephone and internet connection, to which we will come back later. On average, Norwegian households spend more than 31% of their total annual expenditures, i.e. nearly 136,000 NOK, on housing and utilities.
Buying property does not come much cheaper, either. The majority of Norwegians (nearly 80%) 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 March 2014, the national average asking price for one square meter of property was close to 32,000 NOK. Again, Oslo is even more expensive, with prices for a square meter averaging around 44,000 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.
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 2015, prices for one KWH were around 0.864 NOK, including taxes and expenses for grid usage. As such, 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. Well-known providers of services such as broadband internet connections, cell phone contracts, telephone landlines as well as even television are for example Telenor 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 100-150 NOK, you can get a basic cell phone contract with 150 minutes, SMS and MB free. A landline will set you back 80-100 NOK plus telephone charges and a basic television package cost around 200 NOK a month at the time of writing.
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.
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 amounts to 2,729.16 NOK for 2014.
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