Norwegian housing prices fall in December, likely to drop slightly further

Norwegian housing prices dropped in line with trend in December. Prices fell 0.5 percent on a seasonally adjusted basis in the month. On a year-on-year basis, the prices dropped 2.1 percent. The drop is in line with the trend, and there is no sign of the downturn intensifying. The figure is slightly on the downside to Norges Bank’s forecast of a fall of 0.25 percent on a sequential basis.

According to a Nordea Bank research report, the prices are expected to fall a bit further before they stabilize in the spring. However, with low mortgage rates, banks willing to lend, falling unemployment and rising optimism, there is no reason for a sharp of long-lasting decline in housing prices.

“The rather moderate drop we foresee will not threaten the upswing in the Norwegian economy. Nor will today’s figure threaten Norges Bank’s view on such an upturn”, added Nordea Bank.

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