Norwegian home prices remain unchanged in June, Norges Bank likely to hike rate in September

Norwegian home prices remained the same in June on a seasonally adjusted basis, bringing the annual growth up by 0.5 percentage points to 1.5 percent. The sideways development in house prices was consistent with the view that the recent upturn in house prices should be short lived, although a slight rise was expected in seasonal adjusted prices in June, noted DNB Markets in a research report.

A rise in supply of new homes, rate hikes from September and low population growth is likely to hamper house price growth ahead, but a sharp downturn is unlikely as the macro outlook in general is quite positive. The central bank is expected to hike the key rate in September.

Norway’s existing home prices remained the same. Unadjusted prices dropped 1 percent, while the annual growth rate rose to 1.5 percent in June from May’s 1 percent. Prices in Oslo dropped 1.3 percent in May and are up 7.9 percent so far this year. The annual growth rate rose to 1.6 percent. The weakest annual growth rate among the largest cities was in Trondheim, with a 0.5 percent fall in June.

Home turnover came in 9.3 percent higher year-on-year, while home sales came in 2.1 percent higher year-on-year. The number of unsold homes were up 0.8 percent sequentially and 2.2 percent year-on-year.

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