Norway housing will drag the country down just like expected in Sweden
Friday, 06 September 2013
The economic crisis seem to have helped Denmark maintain a slightly more relaxed housing market in that the housing sector here is not experiencing the type of price growth as seen in Sweden and Norway.
We have written in the past years since we started reported about the businesses of this region, in 2010 that Norwegian house prices will bring down that economy. Also various internationally facing financial organisations and the European commission such as now the International Monetary Fund (IMF) said in 2011 that the Norwegian housing prices were 15 to 20 percent too high.
Norwegian housing / scancomark.com
The IMF has come back again in its report for 2013 that they are now overvalued by 40 percent and that it fears a violent crash in the Norwegian housing market, according to the IMF report that came out yesterday.
Contained in its Article IV Consultation with Norway, the organisation writes that
"House prices are high and increasing, and household debt is also high."
The IMF continues to writes that the Norwegian authorities tightened lending guidelines for mortgage loans in December 2011, and they are considering options for further tightening macro prudential limits including by increasing risk weights on mortgage loans. They are also consulting with other Nordic countries on how to regulate the operations of bank branches operating in Norway but headquartered elsewhere in the region.
The only country that that house prices similar to Norway at global level is Canada. In Denmark, Sweden and Finland the prices are between 10 and 22 percent too high, according to the IMF.
Yesterday, we also wrote that the IMF was warned that of its impending housing bubble and given the size of its economy, that if it pops, it would cripple banks and create a financial crisis in the Nordic and Baltic countries.
by Scancomark.com Team