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Fast Comment NorwayHousing prices flatlined (S.A.) in June; somewhat below Norges Bank's estimate, but trivial forecasting error

  1. Housing prices flatlined in June, following solid growth in April and May
  2. Somewhat below Norges Bank's near-term estimate, but trivial forecasting error given the volatility
  3. Norges Bank is widely believe to hike its policy rate in September
Unchanged housing prices in June (S.A.)
According to Eiendom Norge, housing prices were unchanged in June (S.A.), following average growth of 1.1 percent throughout April and May. The moderation in June was expected, given anecdotal evidence from both realtors and more importantly the separate price index from OBOS. More fundamentally, we have argued that the recent price spiral from April and May would not be extended: housing completions are on the rise, population growth has fallen markedly due to lower net immigration, and expectations are for higher mortgage rates. Norges Bank is widely believed to raise its policy rate in September. The outcome for June was somewhat lower than expected by Norges Bank, as the Bank’s near-term price estimates are closer to the range of 0.3-0.4 percent. Further ahead, Norges Bank has anticipated a slowing toward 0.1-0.2 percent m-o-m. However, the slight forecasting error for June was trivial, as the monthly figures are volatile. The upshot is that housing prices have moderated, something that should be well received.


Marius Gonsholt Hov

Senior Economist


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