Norwegian housing prices rise strongly in May, Norges Bank likely to hike rate in September

Norwegian housing prices expanded sequentially in May. Housing prices rose 1.1 percent, after rising 1 percent in April. On a year-on-year basis, housing prices rose 1 percent. The figures released today came in above Norges Bank’s projection. It anticipates housing price to fall on an average by 1.42 percent in the second quarter, while it might end up close to 1 percent.

The central bank is likely to see the risk of a too solid growth in housing prices and the following risk of financial unbalance as rising. Solid growth in housing prices also argues for increased housing investment looking forward. The figure released today argues for the central bank to hike rate in September, noted Nordea Bank in a research report.

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