Discussing The Norwegian Housing Bubble

Nick Kamran discusses the housing in Oslo, Norway and why it’s time to avoid it.

Artificially low interest rates are driving up apartment prices, pushing people deeper and deeper into debt.  Key bubble indicators are capitalization rates (housing prices rising faster than rents). This story references previous articles:

Are 100-Year Mortgages Next? Effects of Negative Real Interest Rates on the Nordic Housing Bubble

The Norwegian Economy in 2017: Black Swans Hovering Overhead

Savings is freedom and debt is slavery.  The housing market will never crash. In the end, the central bank and government will extend loan terms out to 100 years if necessary, keeping everyone in their homes. However, never being able to pay off your home means that you become more dependent on your job, limiting your dreams.  Furthermore, housing becomes more unaffordable for the next generation and newcomers.  The other key factor is the Norwegian Krone. As housing prices rise, the Krone has been falling. There is a shell game going on in plain site, turning the NOK into the NOP (the Norwegian Peso).

Instead of buying an apartment, consider buying dividend paying stocks, using the proceeds to cover the rent.  Eventually, reinvesting the payouts and accumulating more shares, ou can cover rent for the whole year, keeping your options open. Having liquid cash allows you to take advantage of opportunities like foreclosures and “fire sales.”  Moreover, dividends and stock prices tend to rise with inflation, keeping you ahead while you retain your freedom and mobility.

In the podcast, Nick suggested the following Norwegian stocks:

Salmar – a fish farming company in northern Norway, paying out generous dividends.

Ekornes – a furniture company in western Norway, over 100 years old (listed in the USA too)

Tomra Systems – Perhaps Norway’s best-kept secret and most innovative company (listed in the USA too).

Kongsberg Gruppen – A diversified engineering and defense company as old as Norway iself (listed in the USA too)


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