Homeownership is a fundamental good in the welfare society
For the Norwegian government, it is essential that people own their own homes, which has contributed to Norway having one of the highest ownership rates in Europe. Along with health, education, and work, housing is one of the fundamental pillars of welfare policy. One of the goals of the government's national strategy for social housing policy spanning 2021 to 2024 is to enable more people to achieve homeownership.
Norway – a Land of Homeowners
A large proportion of the Norwegian population owns their own home. According to Statistics Norway, nearly 80 percent of people in Norway live in a home owned by someone in the household. This makes Norway one of the European countries with the highest homeownership rate. For comparison, the rate is about 70 percent in Sweden and Finland, 60 percent in Denmark, and 50 percent in Germany.
During their lifetime, between 90 and 95 percent of Norwegians become homeowners. The homeownership rate in Norway has been relatively high and stable compared to other Western European countries. Since the early 1980s, about 75 percent of households have owned the homes they live in. There has been very little change in the proportion of homeowners in this country over the past 42 years.
The Historical Backdrop
The high ownership rate in Norway is said to be historically and culturally conditioned. History professor May-Brith Ohman Nielsen points out that historically Norway has been full of small independent farmers and fishermen. It is strong in Norwegian culture that we control our own land and operate it as a separate business, she suggests. Furthermore, Bjørn Erik Øye, housing expert at the Forecast Centre, believes that the high proportion of homeowners may be linked to a late start of urbanization and a predominantly scattered and rural settlement pattern in Norway in the past.
Norwegian housing policy has also contributed to homeowners dominating the Norwegian housing market. After World War II, the state chose to eliminate housing shortages by investing in owner-occupied single-family homes in the countryside and cooperative joint ownership in the cities. This choice set Norway apart from most other Western European countries, including Sweden and Denmark, which built up large public rental sectors in the 1950s, 60s, and 70s.
In addition, homeowners received favorable benefits such as direct state support, the right to deduct interest on debt, and low property taxation. As a result, Norway had a higher proportion of homeowners than most European countries. The ownership rate surged from approximately 51 percent in 1945 to about 70 percent in 1980. The post-World War II housing policy focused on fostering ownership aligned harmoniously with Norwegian tradition and ownership structure. This policy has predominantly shaped the current disposition structure in Norway.
Norwegian Housing Policy Today
The government aims to ensure that everyone lives safely and well. A secure living situation positively affects the quality of life, making it easier to receive and utilize welfare services, complete education, participate in the workforce, and prevent crime. For this reason, housing policy is an essential part of the government's broad welfare policy and effort to combat poverty. Along with education, health, and work, housing is one of the fundamental goods in the welfare society.
Through social housing policy, the authorities aim to prevent people from having housing problems. In the national strategy for social housing policy spanning 2021 to 2024, the government has set four goals to strengthen efforts during this period, the first of which is that more people should be able to own their own homes. The government points out that homeownership provides financial security, which often passes from generation to generation. "In addition, the conditions for stable and secure living conditions are greater for those who own than for those who rent a home". Nevertheless, the government also strives to ensure that renting is a safe alternative.
The government's favorability towards homeowners is also expressed through the continuation of benefits in the tax systems. Homeowners continue to be favored through the right to deduct interest on debt, moderate wealth taxation, and the absence of capital gains taxation. Earlier this year, Norwegian property taxation was a public debate when NHO supported the Tax Committee's proposal from last year to introduce a tax on the benefit of living in your own home. According to Finance Minister Trygve Slagsvold Vedum, the government firmly opposes raising property taxation, emphasizing the importance of maximizing homeownership and ensuring a sense of security in that endeavor.
A Common Goal
In the same direction, we at Address wish to give more people the opportunity to realize the dream of owning their own home, which has driven us to develop our rent-to-own scheme. Owning your own home provides financial stability and better social integration, and increases the feeling of safety and confidence in the future. In other words, living in your own home creates access to a sustainable life.
In addition, through our solution, we want to level out inequalities in our society. The home is a significant financial asset and a preferred form of saving. The fact that more people can own their own homes means that more people have access to an essential source of value creation, which will help to reduce social differences in society.
By making it possible for more people to own their own home through a rent-to-own scheme, we will contribute to fulfilling the UN's sustainable development goal 10, which aims to reduce inequality within and between countries, and sustainable development goal 11, which strives to make cities and communities inclusive, safe, resilient, and sustainable.
Sources: Eiendom Norge, Ministry of Local Government and Modernization, SSB, NRK, DNB, Jardar Sørvoll
