- Third month with sharp drop in house prices
- Other housing markets indicators weakened further
The November house prices statistics confirmed the weak picture of the Norwegian housing market. Prices dropped 0.9% seasonally adjusted and y/y price growth is now close to zero (0.2% y/y). The price development is well in line with our rather pessimistic view on the housing market.
Other housing market indicators weakened further:
- Housing turnover was 11% lower than November last year.
- Time on market increased substantially to 37 days, up from 33 days in October and 31 days in November last year.
- Number of houses for sale was more than 35% higher than November last year.
We stick to our view that house prices will continue down the coming months and we forecast a price drop of 15-20% over the next two years. This will have significant negative effects on growth in the Norwegian economy in 2014 and 2015 which in turn will make Norges Bank cut rates twice next summer/autumn. Read more in the update mentioned above. It is however too early for Norges Bank to signal these rate cuts at this week’s MPC meeting on Thursday 5 December.
Nordea