Norwegian house prices remain unchanged in October

Norwegian house prices remained the same in October on a seasonally adjusted basis. On a year-on-year basis, prices dropped by 0.3 percentage points to 2.4 percent. Unadjusted prices dropped 0.6 percent. Norges Bank had expected four-quarter growth to 2.98 percent in the fourth quarter. With unchanged prices also in November and December, fourth quarter is likely to see a growth of 2.62 percent.

Prices in Oslo were up 1 percent sequentially. The most solid annual growth rate is now in Oslo, while the weakest was seen in Bergen and Porsgunn.

Home turnover was up 6 percent year-on-year, while homes posted for sales were up 10.2 percent. The number of unsold homes rose 0.7 percent from September and is up 2.9 percent year-on-year to a high level in an historical perspective. Average selling time was 43 days, 3 days more than in October last year.

House price growth was slightly softer than the central bank’s expectations in the month; however, in line with the view that rate hikes and increasing supply is dampening house price growth in the second half of 2018, stated DNB Markets in a research report.

The trend in house prices has decelerated in June-October compared to January-May. Sales continue to be high, indicating that demand remains solid, but the number of homes recorded for sales in even higher and hence the number of unsold homes has increased to a high level in an historical perspective.

“An increase in supply of new homes, the rate hike in September (and more to come) and low population growth is expected to continue to dampen house price growth ahead, but we don’t expect a sharp downturn as the macro outlook in general is positive. The house price data does not change our view of gradual rate hikes from Norges Bank and the next hike to 1.00 percent in March 2019”, added DNB Markets.