Are Oust

Rent indices, Oslo 1970‐2008

Purpose - Rents are both a very important cost variable in the housing market, having large welfare and distributional implication, and one of the most important variables in house price research. The aim of this paper is to construct rent indices for Norways capital, Oslo. Design/methodology/approach - This paper uses a unique dataset with 24,257 housing for rent advertisements, creating hedonic indices using the time dummy variable method. Findings - In this paper, the author presents annual rent indices for Norways capital, Oslo, over the period from 1970 to 2008. In addition to an aggregate index, they construct hedonic rent indices for different flat types. Originality/value - Existing Norwegian rent indices start around 2000 or are constructed with the purpose of being a part of the CPI, and are therefore adjusted for change in quality. Since the authors indices are not adjusted for quality, they give new information about Norwegian rent for the past 40 years.

The removal of rent control and its impact on search and mismatching costs: evidence from Oslo

ABSTRACT The removal of the Norwegian rent control in 1982 created a natural experiment that enabled us to investigate whether rent control affected the search and matching process in the private residential rental market in the Norwegian capital, Oslo. We collected and analysed data on ‘housing for rent’, ‘housing wanted’ and ‘housing exchange-wanted’ advertisements in Oslo covering a period from 1970 to 2008. We concluded that the use of newspaper listing services by potential tenants and landlords changed after the rent control removal. Our results indicate that it is more costly, in time and money, for a potential tenant to search for and to find a home under rent control. Moreover, our results indicate that rent control increases the probability of and the distance from the ideal dwelling, in size, standard and location, a potential tenant have to settle for.

Are house prices in the Norwegian capital too high

Purpose - – This paper aims to investigate whether the homes in the Norwegian capital, Oslo, are overpriced. While house prices in many countries dropped after the financial crisis, those in Norway have continued to increase. Over the past 20 years, real house prices in Oslo have increased by around 7 per cent yearly. Design/methodology/approach - – The authors use a vector error correction model to estimate the equilibrium between house prices, rents, construction costs and wages to examine whether house prices in Oslo are overpriced. Findings - – Long-term relationships between house prices, rents, construction costs and wages are found and used to estimate equilibrium house prices in Oslo. The overpricing in Oslo compared to estimated equilibrium prices is around 35 per cent. Practical implications - – Price–rent, price–construction cost and price–income ratios are often used, by practitioners to say something about over- or underpricing in the housing market. We test and find that house prices, rents and construction costs move toward constant ratios in the long run, while wages are found to be weakly exogenous in the system. Originality/value - – Our estimate of overpricing gives households, investors and policy-makers a better understanding of the risk associated with owning dwellings.