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COST OF LIVING

These are the hidden costs of living in Norway

Norway is expensive. You’ve probably heard that buying alcohol and owning a car is pricey, but some of the more hidden costs may come as a surprise. Here are a few.

Published: 3 December 2020 16:19 CET
Updated: 2 January 2022 08:20 CET
These are the hidden costs of living in Norway
Photo: Glenn Carstens-Peters on Unsplash

NRK tax 

Before January 2020, residents of Norway were required to pay a yearly TV license tax. You had to pay a fee for every TV you owned. Since we now receive our news on different types of screens other than our televisions, the government has introduced a new tax model.

As of January this year, the TV license tax has been converted to NRK tax. NRK is the public broadcasting network in Norway, and residents are required to pay their “contribution” or tax, for being a viewer.

The new tax system is based on an individual’s income. So depending on what income bracket you fall into, you will be charged anywhere between 200 to 1,700 kroner per year. Remember, this is per individual — so if you and your live-in partner are both in the highest tax bracket, your shared budget will see a withdrawal of 3,400 kroner per year in NRK tax. 

Imported foods

Finding the ingredients to make an authentic meal from your home country can set you back. If you are wanting to make a holiday pumpkin pie, for example. A can of pumpkin puree at the grocery store MENY will cost you 90 kroner, or 10 US dollars, in comparison to the 2 dollars you would pay in the US. 

A mango at the same grocery store is often priced at 38 kroner (3.50 euros), and an avocado can cost up to 40 kroner (3.75 euros).

The current weak level of the Norwegian krone against currencies such as the euro, dollar and pound are likely to make it even more expensive to import food to Norway. This will lead to the consumer paying an even higher price on imported foods. 

Luckily, the possibility of finding the ingredient you need is more probable than in the past, as Norway’s residents have greatly expanded their cuisine from traditional Norwegian food in the past two decades.

READ ALSO: Five odd Norwegian delicacies you might think twice about trying

The price of sending or receiving goods abroad through the post

If you have ordered an item to be sent to you from a location outside of Norway, then begin to brace yourself for the price you might have to pay when picking it up from the post office.

On more than one occasion, I have gone to pick up a package from an online clothing store and paid up to 600 kroner (56 euro) in taxes.

Here is a list of the prices you may have to pay when you receive a package at the post office. 

You must pay VAT (Value Added Taxes) on goods you buy online through foreign websites, according to the tax authority, Skatteetaten.  If Norwegian consumers shop online with shops that are not registered, then a VAT and any customs duties will be added when the goods cross over the Norwegian border.  

You must pay VAT on food items including candy, tea, and spices. Most commonly, couriers will pay the duties on your behalf, but may charge you a fee beforehand. 

Depending on what the package weighs and how large it is, the stamps you will need for sending a package outside of Europe can cost anywhere between 32 kroner (3 euros) to 280 kroner (27 euros) according to Posten Norge’s price list.

Organised sports

Want to join a climbing gym or begin golfing on the weekends? No problem. Norway has a wide range of sport facilities, but there are added costs other than the membership fee to consider.

You might need to pay for a permit for these activities. It doesn’t matter if you are a professional rock climber, if you want to be a member of a climbing gym you need to take the safety and learning courses to receive your brattkort, or climbing card. This is required in all climbing gyms in Norway if you want to both climb and belay others. 

The basic course you will need to take to receive your climbing card at Sørlandsklatresenter in Kristiansand, for example, will cost you 990 kroner (92 euros). This is in addition to the 5,500 kroner (516 euros) you would pay a year to become a member. 

According to a 2013 Aftenposten article, Norway is the most expensive country in all of Europe to play golf in. You pay the highest yearly fee and the highest in green fees.

The airport train

The airport train, or Flytoget, may be one of the first surprises you find in the cost of living, traveling, or moving to Norway.

Norway’s airport, Gardermoen, is the closest to the capital city Oslo. An adult ticket on the airport train running from Gardermoen to Oslo’s city centre will cost you 198 kroner (almost 19 euros). This is a steep price to pay in comparison to a neighbouring Scandinavian hub: The airport train in Denmark’s capital city, Copenhagen, used to get to and from Copenhagen airport and the city centre costs only 36 Danish kroner (4.80 euros). 

A few helpful tips! There are trains besides the Flytoget that take you to and from Gardermoen and Oslo’s city centre that cost less than half the price of a seat on the airport train. It will take you an average of five to ten minutes longer as there are stops along the way,, so make sure you have allotted enough time to use this option. 

Check to see if you are eligible for any discounts before you purchase a ticket for the airport train. Students and seniors receive a discounted price. 

Going to the cinema

You might think of a casual night out at the cinema as an affordable activity. In Norway, you typically will really want to check what’s on before you accept an invite to the movies.

A standard movie ticket in Norway is 140 kroner (13 euros). This is double the cost you would pay to see a movie in France. Not just ticket prices, but high concession stand prices attribute to making going to the movies in Norway considered more of a special occasion than a casual activity. Two sodas and a medium popcorn purchased at a movie theatre will cost you  around the same price as the movie ticket. 

Bakery bread

Bread is a staple of the Norwegian diet. Of course, purchasing goods from a bakery will cost more than in a regular grocery store, but the price of some breads in a bakery will make you wonder if you have heard the cashier correctly.

Typically, a loaf of bread costs around 35 kroner (3.2 euros) in grocery stores, but some artisan breads make this seem like a budget option. Salt and Pepper bread at Edgars Bakery in Kristiansand costs double the price. Even more astonishing, a loaf of sourdough bread at Ille Brød Bakeri in Oslo costs 98 kroner (9 euros). 

Bakery breads are delicious, but the quality of grocery store bread in Norway is so high, it’s not necessarily worth paying double, sometimes triple, the price at a bakery. 

The high prices of bread in general in Norway can have to do with the fact that there are only two mill groups in the country, as previously pointed out by TV2. They are able to mark-up the price they charge to grind the wheat as there is little competition, and the demand for bread is so high. 

If you are looking to cut down your grocery budget, you can also make your own bread. Dinside has broken down the price for the amount of ingredients needed to make a simple ‘everyday’ bread in Norway. The cost for making a loaf of basic bread can be as little as 3,34 kroner (0.31 euro).

Useful vocabulary

  • inntekt: income
  • billett: ticket
  • idrett: sport
  • postkontor: post office 
  • utenlandsk mat: foreign food 
  • kino: cinema 

Did we miss any of the hidden extra costs of life in Norway? Is there anything else you’d like us to write about? Let us know.

 

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ECONOMY

What Norway’s latest interest rate increase mean for your finances

Norway’s central bank has raised the key policy rate to three percent. Here’s how that can directly impact your finances. 

Published: 24 March 2023 13:03 CET
What Norway’s latest interest rate increase mean for your finances

High inflation, high economic activity, high employment levels, and a weak krone were behind Norges Bank, the central bank of Norway, raising the key policy rate. 

Analysts predict the bank will continue raising the key policy rate to between 3.5 and 3.75 percent by this autumn. 

While the numbers may not seem massive, and the topic of interest rates may seem dry, these decisions can directly impact your finances. 

The most obvious and immediate impact of the rate increase means more expensive loan and remortgage repayments if you aren’t on a fixed-rate deal. 

A mortgage of around two million kroner can now be considered 2,900 kroner a month more expensive than a year prior. This will be noticeable in the payments you make in the coming months, as it usually takes the banks in Norway six to eight weeks to introduce higher rates. 

Around 95 percent of Norwegians have floating interest rates, meaning many will feel the squeeze of interest rates increasing in the coming months. The next hike from the central bank is likely to be announced in May. 

Following the hikes, many should expect a mortgage interest rate of around 4.8 percent by early next year. Meanwhile, Carsten Henrik Pihl from the Homeowners Association told the Norwegian newswire NTB that a mortgage rate of 4.5 percent could be considered a good deal. 

Mortgage rates are expected to remain at the peak of almost five percent for around the next two years, Nordea’s chief economist Kjetil Olsen told business news publication E24. 

Higher interest rates eat into disposable income. This means people will spend less than they would otherwise generally do and reduce the demand for homes, cooling the property market. 

“Interest expenses increase and eat away at disposable income so that it reduces purchasing power. This, in turn, reduces both housing demand and general consumption,” Nejra Macic from the Forecast Centre told E24. 

Lower demand for housing may result in property prices dipping or slowing down, which is good news for buyers who have trouble keeping up with soaring prices, but news for those who may have bought recently or plan on a quick sale. 

On a more macro-level, lower consumption may slow inflation, which Norges Bank has always intended to achieve with interest rate raises. 

Those who are young or single are most likely to feel the squeeze of the latest interest rate increases as they tend to have a higher ratio of debt to income, Macic explained to E24. The same could be true for those living in Oslo, as traditionally, the capital has the highest debt-to-income ratio in Norway. 

Additionally, the interest rates will also impact how much value you get for your kroner when you go abroad. Several factors are currently contributing to the krone being at its weakest level for several years. 

Among the factors is interest rates in Norway being lower than in the Eurozone and the US. This makes the krone less attractive than the euro and the dollar for investors. 

Even with the forecasted rises, interest rates are unlikely to be higher in Norway than in other countries. This has led to some analysts predicting that the krone would likely remain weak as interest rates would have to be hiked higher to boost the krone. 

“I do not believe that Norges Bank, through the interest rate differential, will be able to secure a stronger krone exchange rate over time,” Kjetil Martinsen, the chief economist for Swedbank, told Finansavisen. 

A weaker krone means you get less value for your money abroad, making foreign trips and holidays more expensive. A weak krone also makes imports more expensive, meaning that goods that aren’t produced in Norway become more expensive. 

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