Homebuyer trends in Norway
September 24, 2021
As a developer, keeping up to date on homebuyer trends is important. By better understanding what different groups in the population require or look for when considering their next investment in a home, future residential development projects can be planned in accordance with relevant market needs. In addition, such information can be used strategically for marketing purposes when addressing different target groups with customized content. According to Eiendom Norge, the largest proportion of buyers of newbuild homes are in the age groups 30-45 years and 60+ years. Furthermore, a survey conducted on behalf of Marketer shows that the general willingness to buy newbuild homes is high, with as much as 80% of respondents stating this. The survey also addresses what factors people emphasize the most when purchasing a new home. Read on for more insights into the market for newbuild homes in Norway.
Who purchases newbuild homes?
On average, 29% of newbuild buyers are in the age group 30-45 years, and this group is typically young families in the establishment phase. Furthermore, 26% of newbuild buyers are in the age group 60+ years, and these often move from a detached house to an apartment to avoid maintenance. 23% of those who buy newbuilds are under 30 years old, while 22% are between 45 and 60 years old.
These percentages vary somewhat among the four largest cities in Norway. While the largest proportion of newbuild buyers is in the age group 30-45 years in Oslo, Bergen, and Stavanger/Sandnes, most newbuild buyers in Trondheim are below 30 years old. The majority of people who buy a newbuild home move into the home to live there themselves, while some purchase a newbuild home purely for investment purposes. Oslo is the city in Norway that has the largest proportion of investors among buyers.
In a survey among 503 respondents conducted by Norstat on behalf of Marketer, it was found that 80% of the respondents are willing to buy newbuild homes. Of the total respondents, 40% were in the age group 25-39 years, 45% between 40-59 years, and 15% over 60 years. Furthermore, the survey addressed various aspects of homebuyers' assessments in relation to buying a new home in general and in relation to new development projects, as well as what advantages and disadvantages buying of a newbuild home entails and what qualities and information homebuyers are looking for in relation to new developments.
- Willing to buy a newbuild home
What is most important when evaluating a potential home?
For many, purchasing a new home is the most important purchase they make in life. Evaluating a potential home can prove to be more difficult than what was first anticipated, and homebuyers will normally not be met on all their requirements. Thus, it is relevant for homebuyers to prioritize their criteria when considering new potential projects. Respondents in the survey state that the five most important criteria for assessing a potential new home are the following: (1) price, (2) size, (3) floor plans, (4) maintenance needs, and (5) solar conditions. However, these criteria vary slightly among different segments. For example, parking opportunities are often a more important factor for homebuyers in the age group 60+ than for other age groups.
Facilities in the area around a development project play a major role for many when assessing how attractive a potential new home is. When asked about the most important qualities of the area surrounding a potential home, the distance to the nearest grocery store and other shopping opportunities is the most frequent answer, closely followed by noise levels and distance to the nearest city center. Other important factors include distance to work, safety, nearby outdoor and recreational areas, and immediate public transportation offerings.
Advantages and disadvantages of buying newbuilds
When addressing the topic of newbuild homes, it is natural to compare the advantages and disadvantages of newbuild homes versus second-hand homes. According to the respondents, the biggest advantages of buying newbuild homes are the reduced needs for maintenance and that new buildings comply with the latest standards and requirements for homes. The fact that no one has lived in the home before is also beneficial, as is the expected high quality. Furthermore, the price is usually fixed, so that bidding rounds are not needed.
On the other hand, the biggest disadvantages of buying newbuild homes can be uncertainties about delays in the project and whether the quality promised is actually delivered. The fact that it normally is not possible to enter viewings in the same way as with second-hand homes can also contribute to this uncertainty as there is no opportunity to physically validate the qualities of the home. Homes in new development projects are normally more expensive per square meter than for second-hand homes, which also can be an obstacle for many.
What makes people register their interest in a project?
Information that contributes to potential homebuyers registering their interest early is to a large extent information about the combination of location and prices. In order to secure as many leads as possible, it may therefore be a good idea to inform early about prices for the units in the project. It is also relevant for the respondents to know if there is more development happening in the area where the property project is located. If the area surrounding the project is developed for example through an expansion of cultural facilities or shopping opportunities, it would be a positive thing to inform about on the project's website or similar. Furthermore, it is important for many to get information about the size ranges of the various housing units early to determine whether the project is of interest. In addition, photos of the project as well as sample photos of the housing units help to establish interest.
Which factors are particularly important in the assessment of newbuilds?
Among other important factors when evaluating newbuild homes is quality of both the interior and the exterior. Furthermore, the position of the apartment in the building is important, as it can determine other factors such as the view or solar conditions. The move-in date is also relevant for many when evaluating a project. Finally, warranty is an important element that can help the buyer feel more secure in the decision to choose a brand-new home over a second-hand home, thus most homebuyers will be interested in familiarizing themselves with the requirements and rights they have in that respect.
In newbuild homes, it is often possible for homebuyers to be involved in deciding different add-ons or adjustments if done early in the process. Thus, such opportunities are also important for many. The most essential add-ons among those surveyed are kitchen design, bathroom styles, kitchen surfaces, flooring materials, and electrical solutions.
Information demands following the registration of homebuyer interest
When having registered their interest in a project, the respondents want information about when the floor plan is available, as well as when new photos or visuals have been published. According to the survey, there is a desire to receive monthly updates on the construction process of a project. In addition, information about the sales start and the purchasing process is considered valuable.
To summarize, by staying up to date on trends and requirements among homebuyers, developers can acquire essential insight for future housing projects. This insight can in turn be used to optimize marketing strategies and customize project communication, as well as keeping potential buyers interested until the start of the actual sales phase.