One of the world’s hottest housing markets is now cooling fast, sparking concern that a bubble is bursting after the rapid price increases over the past years.
Average nationwide house prices fell seasonally adjusted 0.7 percent in June, declining for a second month, Real Estate Norway, Eiendomsverdi and Finn.no said Wednesday in Oslo. Annual nationwide gains slowed to 6.3 percent from 8.3 percent in May and to 11.5 percent from 16.5 percent in Oslo. In the month, prices in the capital plunged 3.1 percent.
‘This is one of the weakest June months on record,’ Christian Vammervold Dreyer, the head of Real Estate Norway, said at a press conference. ‘The uncertainty is bigger than in a very long time.’
The housing market, which has been an economic bulwark against a crash in the nation’s oil industry, is cooling after the government tightened lending standards, specifically targeting speculative buying in Oslo. Spurred by record low rates and surging home prices, households have amassed debt of more than twice their disposable income, making Norwegians among the most indebted in the western world.
This post was published at bloomberg
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