The Hunt for a Home – The Fixation and Social Stigma On the Need to Own a Home
As I scroll through Facebook, ads for apartments on sale keep blocking my newsfeed. Amongst posts by friends showcasing their new homes, engagement blings and babies, it seems like Mark Zuckerberg has been bought and keeps trying to influence the Norwegian 20 to 30-year olds to buy DNB-approved apartments. Looking at these ads, it’s pretty obvious that I need over 3 million NOKs to be able to afford an apartment in downtown Oslo that isn’t even the size of a shoe box. Over 3 million NOKs for a tiny home…
With relatively high wages and a stronger purchasing power than the generation before us, it is not impossible for me to eventually fulfil my wet dream of a cozy, fully-stocked kitchen, a living room with high ceilings and a brick wall, and a wrought-iron balcony overflowing with fairy lights and plants. At 29, having my own place would not be the most absurd course of action. A place where I can run around in my underwear, invite friends and family over for dinner, store all my most prized possessions, and a place to call home.
And by becoming a homeowner, I will finally start to fulfil the societal expectations that have been placed upon my peers and I. For a Norwegian millennial, renting is deemed a financial loss and not fitting with societal norms. Owning the keys to your home signals that you have your finances in order, are on the right path, and are taking the predefined steps to become a full-fledged adult.
So, as a 29-year-old, and a renter without any prospect or financial capability of owning a home in the near future – am I losing at life?
The concept of a home in a city, with separate rooms for diversified purposes, and owned by a single person or a family unit, is a relatively new concept. Granted you had the affluent families who built grandiose houses a bit outside the most industrialized areas of the cities, but a hundred years ago, most 20 to 30 year olds, did not own their own pad. Let’s take a look at some history.
The 19th century saw the boom of urbanization and with work centralizing in the cities, newcomers like single people, migrants, seafarers and female workers rented. Renting was the norm, and gave the flexibility of renting by the night, week, month or by the season, depending on your employment status. Workers crowded into apartments, and in the 1920s a fourth of Oslo’s inhabitants lived in one-bedroom apartments with an average of 3.5 inhabitants. However, this changed following World War II. Owning a home became what to aspire to. Higher wages, lower interest rates and down payment requirements permitted more people to buy homes, though with significant regulation. At the removal of the housing regulation in the early 1980s, costs quadrupled but people were given the choice to purchase the kind of home they wanted, not what was allocated to them. People settled wherever they wanted to live, in either cities or towns, in apartments or houses, with the freedom to finally live in the type of home they wanted.
Today, nearly half of the Norwegian population live in single-unit homes. The cost of a home is typically three times the average yearly income, at least. If considering one of the ‘weekly apartments’ on finn.no for Oslo, it is six times a yearly income. Average living space per person is close to 60 m2, and one square meter costs roughly 40,000 NOK, though over 66,000 NOK in Oslo. Norwegian ‘floor area per capita’ is among the world’s highest, and we enjoy a standard of living and housing quality unparalleled to many other countries. The average number of persons per household has roughly halved since 1930, with 2,1 persons per household. We have more space than before, and we can choose where and what we want to live in, with no visible housing shortage. In conclusion, we are living the dream, though a rather costly one.
But why are we all so caught up on buying and owning a home?
It seems like a day doesn’t go by where you don’t read something in the news about the ups and downs of the housing market or predictions on future fluctuations. Buying your own apartment is seen as one of the most secure investments for your hard-earned money, and by securing it in a physical space, you are placing your money where you can see it, enjoy it, and reap the financial benefits of it later when you might sell it for a profit. Consumer economists and professionals within personal finance all vow that owning is the economically smart decision to make for today’s millennials, and with the added bonus that the Norwegian tax system is beneficial for purchasers and that interest rates are stable and low, buying has never been more appealing or attainable. Cash out the 15 percent to cover equity financing for first time home buyers and everything is set up for you to get your own place.
Renting on the other hand, is often seen as ‘throwing money out of the window’. If social norms expectations don’t already make you feel bad for not conforming to the standard and owning a home already, media bombardment of articles on housing statistics and home owning benefits have joined the bullying crew. And the bullying seems to be working. Over 80 percent of Norwegians over the age of 25 own their own home.
But despite this high number, around thirty percent of the households in Oslo, Trondheim, Tromsø and Bergen rent. And if you look to other Scandinavian countries, the percentage of the population that are tenants are way higher. Rent controls and a strong history of tenancy have prohibited the formation of social stigma surrounding renting. 38% of Danes and almost 35% of Swedes are tenants. In Switzerland, over 57% of the population rent!
So why is home-ownership such a hot topic in Norway? And do we all have to cave to the social stigma and follow the same mind set in thinking that tenancy is for the ones that can’t get their finances in order? Sure, owning a home has its perks. But so does renting. You are incredibly flexible: you can move to a new place, a new city or a new country without having to worry about what to do with your apartment. You aren’t exposed to the falls and rises of the housing market and interest rates, and don’t have to worry about its effects on your monthly rent payment- it’s pretty stable. You don’t have to worry about many maintenance costs that home-owners do. And if you really don’t like your neighbors, you can always rent another apartment!
But whatever you choose, whether to own or rent, should be a decision you make, not because of societal pressures and social expectations. And whether you choose to rent because of choice or lack of start-up capital, renting should never be deemed as something negligent or wasteful. Less than 80 years ago, renting was the norm in Oslo, and still is in many cities today. Choose the lifestyle you want and enjoy the type of housing situation you got going, and don’t let friends, foes, media or or anyone else tell you otherwise.
SOURCES: DNB (2016). EN TO-ROMS TIL BARE 50 000 KRONER?!, KROGSVEEN (2018). BOLIGPRISSTATISTIKK., AFTENPOSTEN (2016). A LEIE ER IKKE ET ALTERNATIV I NORGE., CITYLAB (2018). WHEN AMERICA’S BASIC HOUSING UNIT WAS A BED, NOT A HOUSE.,SSB (2018). BOFORHOLD-REGISTERBASERT., DNB (2018). HVA LØNNER SEG: Å EIE ELLER LEIE BOLIG?, EUROSTAT (2018). DISTRIBUTION OF POPULATION BY TENURE STATUS, TYPE OF HOUSEHOLD AND INCOME GROUP – EU-SILC SURVEY.
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