Housing prices were down another 1.1 percent in November and it hasn’t taken so long to sell a home since the finance crisis in 2008. International credit analysts and economists, however, still think Norwegian housing prices are too high and that a so-called “market correction” will hurt the economy.
It now takes an average of 46 days to sell a home, reported newspaper Dagens Næringsliv (DN) earlier this month. That’s 10 days longer than in November of last year and six days longer than in October. Average housing prices also slid nationwide, in all markets.
Many Norwegian analysts think that’s healthy, after a period of double-digit price increases. Both the international Organization for Economic Cooperation and Development (OECD) and the US credit rating bureau Moody’s, however, have expressed concerns about Norwegian housing prices. Rental rates haven’t risen in line with the prices, and that, analysts claim, can leave Norwegians with a housing bubble that may burst.
Housing market concerns have also been blamed for the weakness of the Norwegian krone, which strengthened last week on news that interest rates may rise sooner than expected, but now the krone has weakened again.The OECD, meanwhile, thinks housing prices are out of balance with not just rental rates but also income levels in Norway, and that they’ve peaked.