Norwegian existing home prices fall sequentially in November

Existing home prices in Norway dropped sequentially in November. Adjusted for seasonal variations, the prices fell 0.5 percent, as compared with expectations of unchanged prices. Unadjusted prices dropped 1.5 percent, while the annual growth rate dropped 0.4 percentage points to 2 percent in November.

Norges Bank had expected four-quarter growth to 2.98 percent in the fourth quarter. With unchanged prices in December, the fourth quarter growth is likely to come in at 2.14 percent, noted DNB Markets in a research report.

Prices dropped 0.7 percent in Oslo. The strongest annual growth rate is now in Oslo, while the softest is in Bergen.

Home turnover rose 1.6 percent year-on-year, while homes posted for sales were 1.7 percent up. The number of unsold homes dropped by 10.9 percent from October, but is up 5.1 percent from November last year to a high level in an historical perspective. Average selling time was 49 days, 2 days more than in November last year.

House price growth came in below Norges Bank’s expectations and the trend in now negative. A rise in supply of homes appears to weigh on price growth.

“We expect this to continue to dampen house price growth ahead, together with low population growth and gradual rate hikes, but we don’t expect a sharp downturn as the macro outlook in general is positive”, stated DNB Markets.

The high number of sales underpins the view that demand continues to be strong. Overall, the house price data is not soft enough to change the view of gradual rate hikes from Norges Bank and the next hike to 1 percent in March.