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
