Norwegian house prices drop again in July, housing market likely to continue easing in months ahead

Norwegian house prices dropped again in July after falling in the prior month. House prices fell 0.2 percent sequentially on a seasonally adjusted basis after a drop of 0.7 percent in June. The cooling down of the Norwegian housing market is expected to continue in the coming months, noted Nordea Bank in a research report.

In line with the development through the spring and summer there are major regional differences. Oslo recorded the biggest fall of 1.8 percent seasonally adjusted, while most other major cities had modest positive growth when correcting seasonal effects, stated Nordea Bank.

There are little signs that the correction in house prices in Oslo is over. The number of houses for sale is at high levels indicating that this is still a “buyers’ market”. But the fear for a widespread crash is restricted. In most parts of the nation outside of Oslo house prices look reasonable and fundamentals are strong with low interest rates, declining unemployment and rising employment.

The house market is evidently weaker than Norges Bank’s forecast, which is in line with 0.1 percent monthly gains. But as long as the downturn remains mainly an Oslo phenomenon, the impact of monetary policy is expected to be restricted, added Nordea Bank.

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