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The housing market in Norway is experiencing its weakest August performance in the history of housing price statistics, with a mere 0.4 per cent increase in house prices. When accounting for seasonal variations, there is actually a 0.6 per cent decline. As of the end of August, the average price of a home in Norway stood at 4.53 million kroner.
In Oslo, prices experienced a notable 1.0 per cent decline in the previous month, resulting in a 1.4 per cent drop when adjusted for seasonal fluctuations. In contrast, Bergen delivered the strongest set of figures, with house prices rising by 1.2 per cent when adjusted for seasonal development.
Kjetil Olsen, Chief Economist at Nordea Markets, interpreted the recent data as a sign that the effects of interest rate hikes are beginning to take hold. Olsen further noted that these trends align with other indications that suggest a challenging autumn lies ahead for the Norwegian economy and housing market.
Lauridsen echoed Olsen's concerns about the future trajectory of housing prices, expecting a softer development beyond the autumn. Norway's Central Bank (Norges Bank) initiated a series of interest rate hikes to curb inflation, culminating in a policy rate of 4 per cent in August. This was followed by corresponding adjustments in mortgage interest rates by commercial banks in the country.
The visible impact of interest rate hikes on the Norwegian real estate market is seen in fewer people buying new homes and a stall in the construction of new homes. In July, housing prices declined by 1.1 per cent, although there was a seasonally adjusted 0.2 per cent rise. June also witnessed a 1.2 per cent decrease in housing prices following a modest 0.8 per cent increase in May.
In summary, the housing market in Norway is beginning to feel the effects of rising interest rates, resulting in a slowdown in housing price increases. Experts anticipate a challenging autumn for both the Norwegian economy and the housing market. These developments underscore the importance of monitoring interest rate policies and their impact on the real estate sector.
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