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Home* News and Stories → Housing mar­ket in Lon­gye­ar­by­en: shor­ta­ge, spe­cu­la­ti­on and Airbnb

Housing mar­ket in Lon­gye­ar­by­en: shor­ta­ge, spe­cu­la­ti­on and Airbnb

Lon­gye­ar­by­en is by many means a spe­cial place. The litt­le town with just over 2,500 inha­bi­tants attracts many on a sea­so­nal or short-term basis. The­se peop­le are working in tou­rism, but also in the buil­ding indus­try or in small tra­de or for any com­pa­ny that needs labour for­ce for shor­ter peri­ods. Many com­pa­nies are cur­r­ent­ly facing pro­blems to find housing for their employees, such as the tou­rism indus­try which has a very busy time now as the important win­ter sea­son is in full swing. Lar­ger com­pa­nies as well as insti­tu­ti­ons such as the uni­ver­si­ty (UNIS)/Polar Insti­tu­te, Sys­sel­man­nen and local admi­nis­tra­ti­on have got con­si­derable num­bers of flats for their employees to be able to com­pe­te with employ­ers on the main­land.

Recent years have seen signi­fi­cant pri­ce incre­a­ses for buy­ing and ren­ting, which has to a lar­ge degree to do with evacua­tions becau­se of the avalan­che dan­ger. The­se evacua­tions have beco­me a regu­lar and long-las­ting phe­no­me­non now that is affec­ting who­le streets.

As in many other pla­ces in the world, the­re are tho­se owners who have dol­lar signs blin­king in their eyes. A num­ber of flats are ren­ted out through Airbnb, most­ly to tou­rists on a short-term basis. This is cer­tain­ly an attrac­ti­ve offer for the users and it inclu­des flats which are used by com­pa­nies for their employees when the­re is demand, and not­hing is wrong about offe­ring the­se flats on the mar­ket while they are not used. But the­re are also tho­se flats which are now exclu­si­ve­ly used for Airbnb and thus not avail­ab­le for the local housing mar­ket any­mo­re, a situa­ti­on that is met with gro­wing cri­ti­cism both local­ly and else­whe­re.

One of the lar­ger owners in Lon­gye­ar­by­en, the main­land com­pa­ny Lon­gye­ar­by­en Boli­gei­en­dom, bought seven houses with a lar­ger num­ber of flats in 2012 for a pri­ce of 37 mil­li­on NOK (about 4.8 mil­li­on Euro back then). Ren­tals were soon incre­a­sed by 45 %. Now, Lon­gye­ar­by­en Boli­gei­en­dom has announ­ced to sell five of their seven houses with a total of 84 flats, aiming at a pri­ce of 77 mil­li­on NOK. The com­pa­ny has said to have spent many mil­li­ons on reno­va­ti­on, but this might well be (over)balanced by the inco­me from ren­tals. Lon­gye­ar­by­en Boli­gei­en­dom might well lea­ve the local mar­ket with a pro­fit not far form 100 % of the ori­gi­nal invest­ment after six years. The two houses that are not (yet) for sale are in an area offi­cial­ly expo­sed to an avalan­che risk, and a poten­ti­al sale will not be con­si­de­red befo­re the slo­pes have not been secu­red tech­ni­cal­ly. Cur­r­ent­ly, the­se houses would be hard to sell, if not impos­si­ble.

Longyearbyen housing market

No place to stay in Lon­gye­ar­by­en the­se days? Tough luck, inde­ed!

On top of all this came the news that the local admi­nis­tra­ti­on keeps a num­ber of flats vacant. This is obvious­ly con­tro­ver­si­al at times of a stres­sed housing mar­ket. It is about 24 flats in way 222 which have been vacant for mon­ths now. Lar­ge invest­ments were made actual­ly just last year to brush the­se flats up. Repre­sen­ta­ti­ves of the local admin­stra­ti­on said that it was deci­ded against ren­ting the­se flats out even on shor­ter con­tracts as long as final decisi­ons have not been made regar­ding the avalan­che situa­ti­on and secu­ring the dan­ge­rous slo­pes of Suk­ker­top­pen, a pro­cess that has alrea­dy been going on for years. In addi­ti­on comes that fur­ther invest­ments need to be made to renew the foun­da­ti­ons of the buil­dings. Nevertheless, it is said that the flats could be ren­ted out and used and it seems to be a poli­ti­cal decisi­on to do so or not. Lea­ving 24 flats vacant for mon­ths, pos­si­b­ly years, in times of a housing mar­ket under pres­su­re is not necessa­ri­ly a decisi­on that is met with gre­at sym­pa­thy, while some a des­pa­r­ate­ly loo­king for housing for them­sel­ves or their employees.

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last modification: 2018-03-02 · copyright: Rolf Stange
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