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Fast Comment NorwayHousing prices down 0.5 percent in November; somewhat weaker than expected but too early to call the start of a down trend

  1. Housing prices at -0.5 percent m-o-m in November, seasonally adjusted
  2. Oslo a touch weaker: -0.6 percent, seasonally adjusted
  3. Too early to conclude that the trend has shifted downwards
Seasonally adjusted housing prices fell 0.5 percent in November
According to Eiendom Norge, seasonally adjusted housing prices fell 0.5 percent in November. Through the summer and autumn we have seen a levelling out of housing prices. Even though the fall in November was somewhat larger than expected, it is too soon to conclude that the trend has shifted clearly downwards. November is a month with a low number of transactions, and over the past six months, housing prices have on average fallen by 0.06 percent per month (S.A). The outcome was weaker than expected by Norges Bank; in its September Monetary Policy report, the central bank expected 0.1-0.2 percent growth in November (S.A). The deviation in November is large enough that the central bank will likely conclude that developments have been on the weak side, but it is unlikely to pull significantly on the rate path at the upcoming meeting later this month. Digging into the regional details: Oslo has, over the past few months, performed a touch weaker than the national average, but the deviation is not large. For Oslo, the monthly change has been consistently negative over the past four months, with November at -0.6 percent m-o-m, when taking normal seasonal variations into account (i.e. the nominal rise in Oslo in October was weaker than usual). All told, the recently released data does not yet alter our assessments. We continue to emphasise some short term downside risks, for Oslo in particular (as already seen in the data). However, the said risks are short term, in our view. This is because sales activity remains at good levels and some of the current price dampening factors, such as higher completions, will gradually abate with lower construction activity. The housing stock is permanently increased, but we believe demand will be able to absorb the increased supply over the coming years. We maintain our view of a modestly positive price outlook for the next few years.



Halfdan Grangård

Senior Economist


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