Norwegian house prices fall sequentially in July

Norwegian house prices dropped sequentially in July. On a seasonally adjusted basis, house prices dropped 0.7 percent. The trend is still moderate, but positive price growth. On an unadjusted basis, prices dropped 1.1 percent and the annual growth rate fell 1 percentage points to 1.6 percent. The central bank has projected four-quarter growth to 1.32 percent in the third quarter.

“With unchanged prices (seasonally adjusted) in August and September, we will end up with a four-quarter growth of 1.38 percent in Q3”, said DNB Markets.

Home turnover rose 8.9 percent year-on-year and the highest ever measured in July, while homes recorded for sales were 2.7 percent up year-on-year. The number of unsold homes dropped 12.3 percent from June, but is up 6.6 percent from July last year and is at a high level in an historical perspective.

Sales have been at a high level for some time, which suggests that demand continues to be strong. Several finished new homes have also led to a high number of existing homes put out in the market, which appears to be holding price growth down.

"We expect this trend to continue ahead, with the rate hikes from Norges Bank also dampening price growth. One should note that a lower sales volume than normal (even if sales in July this year was record high) and a different combination of types of homes being sold than the rest of the year, make house price statistics in July more uncertain than normal”, added DNB Markets.