OSLO (Reuters) – Norwegian seasonally adjusted housing prices rose 0.9% between June and July and is up 5% for the last 12 months, a real estate industry association said in a monthly report on Wednesday.
It was the fastest annual growth since June 2017, driven by cheaper mortage rates as the Norwegian central bank cut its key policy rate to a record low zero percent during the coronavirus outbreak.
While Norges Bank has said it aims to keep rates on hold until the second half of 2022, a sustained rally in housing prices could trigger an earlier tightening, Nordea Markets wrote in a note to clients.
Still, the lift in prices in recent months will most likely subside in the time to come as the effects of interest rate cuts wear off, Real Estate Norway said.
Unadjusted prices increased by 0.4% in July from June. The housing data was compiled by Real Estate Norway, FINN and Eiendomsverdi.
Norway’s crown currency strengthened slightly against the euro, hitting 10.7036 at 0910 GMT versus 10.7120 earlier.
(Reporting by Terje Solsvik, editing by Gwladys Fouche)
