The housing crisis is global — and Norway is not exempt

From Dublin and London to New York, Auckland and Oslo, housing supply is failing to keep pace with the needs of growing cities. Building more homes is essential. But creating realistic routes into those homes is just as important.

Housing is local by nature. A home is built on a specific piece of land, under local regulations, for people who live and work in a particular community.

But the housing challenge itself is increasingly global.

Across many of the world’s most productive and attractive cities, the same pattern is emerging: population and household demand grow, construction fails to keep pace, prices and rents rise faster than incomes, and younger households are pushed further away from ownership.

A recent Financial Times Big Read by John Burn-Murdoch, “How to fix the housing crisis,” describes housing shortages as one of the most pressing challenges facing high-income countries. The article highlights how housing has become increasingly difficult to access in the UK, Ireland and large parts of the United States, particularly for younger generations.

The central conclusion is uncomfortable but important: deregulation alone is not enough, and government intervention alone is not enough. Solving the housing crisis requires more construction, smarter regulation, public support and private capital working together.

Norway may be wealthier, more stable and better governed than many countries facing severe housing shortages. But we are not immune to the same underlying forces.

A common challenge across successful cities

The global housing crisis is not primarily caused by one political system, one type of investor or one planning law.

It is the result of a structural imbalance between the number and type of homes people need and the number of financially viable homes being delivered.

Longer life expectancy, smaller households, lower marriage rates and fewer multigenerational households mean that countries may require more homes even when population growth is moderate. At the same time, economically successful “superstar cities” attract jobs, investment and higher-income residents. When that demand meets insufficient construction, prices and rents rise beyond the reach of many existing residents.

Dublin: demand grew twice as fast as supply

The Financial Times points to Dublin as one of the clearest examples.

Housing demand in Ireland increased by approximately 40 per cent from 2011, while the housing stock expanded at only around half that rate. Dublin rents more than doubled over a decade, outpacing income growth. The share of Irish people aged 25 to 34 living with their parents rose from 19 per cent in 2013 to 42 per cent in 2024.

These are not merely property-market statistics. They represent delayed independence, postponed family formation and a generation whose lives are placed on hold.

London: homes are too expensive to build

London demonstrates another version of the same problem.

Many sites have received planning permission, but construction has stalled because the completed homes cannot be sold or rented at prices that cover land, construction, regulatory and financing costs. In other words, the shortage is no longer only about gaining permission to build. The economics of delivery have broken down.

This distinction matters.

A planned home is not a home. A permitted home is not a home. It becomes a home only when the project can be financed, constructed and occupied.

Auckland and Austin: supply can improve affordability

Other cities show that the direction can be reversed.

After Auckland rezoned large parts of the city for higher-density housing, construction of multi-unit homes increased substantially and rent growth slowed. Inflation-adjusted rents remained broadly flat. Austin similarly experienced a large construction boom that eventually contributed to falling real and nominal rents.

The lesson is not that every city can simply copy Auckland or Austin. Local conditions differ.

The lesson is that supply matters. When enough homes are allowed and financially able to reach the market, affordability can improve.

Manchester: cooperation matters as much as regulation

Manchester illustrates the importance of long-term cooperation between municipalities and private developers.

Local authorities spent years adapting planning rules, incentives and development areas so that housing construction could respond when demand increased. Development was concentrated largely on central brownfield sites, reducing opposition and disruption in established residential areas.

Housing policy is not a lever that can be pulled once. Durable results require political consistency, predictable regulation, local support and capital willing to invest over long periods.

Norway is entering the same territory

Norway does not yet face the scale of housing distress seen in Dublin or London.

But the direction of travel should concern us.

Only 19,498 homes were completed in Norway in 2025, down from 24,032 in 2024. This was the lowest number of completed homes since 2010. Construction permits were issued for 20,184 new homes, an improvement from the previous year but still far below the levels recorded before the sharp downturn that began in 2023.

Housing shortages emerge with a delay.

A project not started today cannot be completed next year. Several years of weak construction therefore create a supply deficit that may not become fully visible until interest rates fall, purchasing power improves or population and household demand strengthen.

By that point, it is too late to produce new homes quickly. Housing is not software. You cannot press “scale” on Monday and deliver 10,000 apartments by Friday.

Oslo reflects the international pattern

Oslo had approximately 725,000 residents in July 2025. Under the municipality’s central projection, the population is expected to reach around 775,000 during 2034 and approximately 831,000 by 2050.

The city will therefore need tens of thousands of additional homes over the coming decades.

But population growth is only part of the equation. Household formation, demographic changes and the type and location of housing being delivered are equally important. A city can technically have enough homes while still failing to provide homes that ordinary households can afford or finance.

Oslo is already Norway’s most expensive rental market. In 2025, the average monthly rent for a two-room home in Oslo and Bærum was NOK 15,260, approximately 29 per cent above the national average. A three-room home averaged NOK 19,030 per month.

For many households, this means paying significant monthly housing costs without accumulating ownership or housing equity.

At the same time, entering the ownership market has become materially harder. Norges Bank estimates that a person earning the median income could afford only around 5 per cent of the homes sold in Oslo in 2023, compared with 15 per cent in 2013. In other Norwegian urban areas, the corresponding share declined from 25 to 19 per cent.

The problem is therefore not limited to households that cannot afford monthly housing costs.

Many people can service the cost of living in a home. What they cannot overcome is the combined barrier created by high purchase prices, equity requirements, borrowing limits and insufficient family wealth.

They earn too much to qualify for traditional social housing, but lack the capital required to enter the ordinary ownership market.

This is the missing middle.

Building more is necessary — but access is the real test

The international evidence points to a clear conclusion: housing shortages cannot be solved without building more homes.

Rent controls, subsidies and financial assistance may protect individual households, but they do not by themselves create additional housing. Measures that manage the consequences of scarcity without addressing scarcity itself risk shifting the problem rather than solving it.

But supply alone is also insufficient.

Even in cities that have materially increased construction, the benefits can take years to reach lower- and middle-income households. Where shortages are already severe, record levels of construction may still struggle to make housing immediately affordable for the people under the greatest pressure.

The strongest international models therefore combine several elements:

• High and consistent levels of private housing construction.
• Faster and more predictable planning processes.
• Public support for households the ordinary market cannot serve.
• Long-term cooperation between municipalities, developers and investors.
• Alternative housing models that reduce the initial barrier to ownership.

Vienna and Helsinki have historically performed better than many comparable cities because they combined substantial social housing systems with relatively high levels of private construction. Their experience demonstrates that public and private housing are not competing solutions. Both are needed.

New ownership models must be part of the solution

At Living Impact, we believe shared ownership can become an important part of the housing infrastructure Norway and other European countries will need.

The principle is simple:

Buy part of the home, live in the whole home and acquire more over time.

Instead of financing 100 per cent of the property from day one, the customer purchases an initial share. Living Impact and its investment partners finance the remaining share. The resident pays for the use of that share and has the opportunity to increase ownership over time.

This can reduce the initial mortgage and equity requirement while allowing the household to begin building ownership from the start.

Shared ownership does not eliminate the need to construct more homes. It can help make construction possible.

By expanding the number of households able to buy newly built homes, shared ownership can strengthen demand for projects, reduce sales risk for developers and help planned housing move from drawings to construction. Long-term institutional capital can act as an external balance sheet for households that have the income to own a home but cannot finance the entire purchase immediately.

This is how social impact and commercial capital can reinforce one another rather than compete.

Housing is social and economic infrastructure

The international housing crisis shows that housing cannot be treated merely as another consumer product or investment category.

Housing determines whether people can move to where jobs are located. It affects when young adults leave home, whether families have children, whether nurses, teachers and service workers can remain in major cities, and whether wealth is built through work or inherited through family property.

When housing ownership increasingly depends on parental wealth, the market stops supporting social mobility and starts reproducing inequality.

The consequences are visible internationally: more young adults living with their parents, workers moving further from employment centres, widening wealth gaps and increasing frustration with institutions that appear unable to deliver something as fundamental as a place to live.

Norway still has an opportunity to act before the problem reaches the scale seen in parts of Ireland, the UK and the United States.

That requires more homes, faster delivery and lower development costs. It also requires financing structures and ownership models designed for the economic reality households face today — not the market that existed twenty years ago.

A global challenge requires local execution

There is no universal housing solution.

A policy that succeeds in Auckland may not transfer directly to Oslo. Vienna’s social housing system cannot be recreated overnight. Manchester’s development model reflects decades of local cooperation.

But the underlying lesson from the Financial Times analysis is universal: successful housing systems require both a functioning market and purposeful public policy. Private developers must be able to build profitably, while society must ensure that lower- and middle-income households are not permanently excluded.

Living Impact is working at the intersection of these needs: connecting housing projects, long-term capital and more accessible paths into ownership.

No single company or product will solve the housing crisis. But new solutions must be developed, financed and scaled.

Failure to act does not preserve the status quo. It produces fewer homes, higher prices and a deeper divide between those who own property and those who may never get the opportunity.

Housing is the infrastructure of people’s lives. Making it more accessible is not only an important investment opportunity — it is one of the defining social challenges of our time.

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