Norway banking major predicts house price fall
“Prices have virtually stagnated after a jump of 1.7 per cent from December 2012 to January of this year. Property prices have fallen in four of the last six months. The price decline was 1.2 per cent in July.”
The bank also added how the summer weather may have contributed to the fall, with the heat keeping people away from viewing property, however.
DNB’s report also suggests that the decline is partly due to Norges Bank interest rates being kept unchanged while the rate of lending has increased.
“We assume that housing prices will rise somewhat further in the autumn, so that annual growth from 2012 to 2013 is 5.2 per cent. We expect to see negative monthly rates from spring next year due to higher unemployment, lower income, and more housing units,” they state.
In other figures towards 2016, the bank forecasts lower wage growth, from 4 to 3.5 per cent, and a base rate increase of 1.5 to 2.25 per cent.
Unemployment will rise from 3.2 to 4.3 per cent, while annual property value growth will turn from 7.7 per cent, to a negative rate of 1.5 per cent, business daily Dagens Næringsliv reports.