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Fast Comment NorwayHousing price growth picks up from June to July

  1. Housing prices up 0.4 percent (S.A.) in July after flatlining in June
  2. On the weak side of Norges Bank's estimate, but summer months notoriously volatile
  3. We expect moderate housing price growth ahead
Housing prices up 0.4 percent (S.A.) in July after flatlining in June
Housing prices in Norway were flat in July, leaving the seasonally-adjusted prices up 0.4 percent in July after having flatlined in June. The 12-month growth rate in housing prices increased to 2.2 percent in July from 1.5 percent in June. Oslo again registered stronger house price growth than the country as a whole in July, with unadjusted housing prices up 1.9 percent on the month vs. zero for Norway. However, according to Eiendom Norge, there are usually large regional differences in July as the number of houses put on the market is very low.
On the weak side of Norges Bank's estimate, but summer months notoriously volatile
Norges Bank has anticipated a monthly change in housing prices around 0.3-0.4 percent (S.A.) for both June and July, while the actual outcome has been zero percent for June and 0.4 percent for July. Toward the end of the year, the central bank expects monthly house price growth to average slightly below 0.2 percent. However, while the development for June and July is slightly on the low side of the central bank’s estimates, it is too early to conclude that the trend is significantly weaker, in our view. Activity in the housing market during the summer months is typically rather low, so the numbers must be interpreted with care.
We expect moderate housing price growth ahead
Ahead, we expect growth in housing prices to continue to show a softer pace than what was observed through April and May. Further out, we believe the combined effect of higher mortgage rates, lower population growth and rising completions will have a dampening effect on overall housing prices. That said, due to rising household incomes and elevated household sentiment, housing prices will continue to trend upward, in our view, albeit at a softer pace.

 


Source: Macrobond

 


 



Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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