* Buyers to borrow 90 pct of property value, up from 85 pct
* Regulations on new home building to be eased
* Data suggest Norway may have avoided housing crash (Adds quote by finance minister, reaction from real estate agents' lobby, background)
OSLO, Feb 6 (Reuters) - Norway's new government is to make it easier for homebuyers to borrow money, fulfilling an election pledge by loosening the rules when concerns of a housing crash in one of Europe's richest economies are receding.
Banks will enjoy more flexibility in assessing the ability of borrowers to repay their debts, cutting the deposit needed to secure a mortgage to 10 percent, the finance minister said on Thursday.
Last year, the banking regulator, the FSA, tightened lending rules, partly to avoid a housing bubble, meaning banks could in most cases only lend up to 85 percent of the value of a home.
In reversing those measures, the Finance Ministry will also ease regulation for the construction of new buildings to help increase the supply of houses and flats on the market.
One of the main concerns of voters in October's election, won by the centre-right Conservatives and the more radical Progress Party, was the obstacles for first-time buyers.
"Everyone needs a home and we want to help most people to have their own," Finance Minster Siv Jensen, who is from the Progress Party, said in a statement.
The Norwegian property market appeared close to the brink late in 2013 after three months of price falls and with the International Monetary Fund arguing that the market was 40 percent overvalued.
But the latest housing data suggest the Nordic country may have avoided a crash as the nation's immense saved-up oil wealth cushioned the economy. House prices declined less than expected in January, falling by 1.0 percent year-on-year.
"I share the FSA's view on the risks of high debts, but I've also taken notice of the fact that property prices are 1 percent lower than in January of last year and that economists see signs of a stabilisation," Jensen said at a housing conference.
Prices were expected to fall 1 to 3 percent on average this year, according to the association of real estate agency firms (EFF).
The head of the agency welcomed the government's proposal.
"This will increase the demand on the market as well as the demand for new buildings, so the supply of new housing should increase," the head of the EFF, Christian Vammervold Dreyer, told Reuters. "So demand and supply could balance each other."
However, economist Erik Bruce was more sanguine, saying that, in practice, some lending flexibility already existed.
"It would be somewhat easier for banks to give loans to borrowers with less than 15 percent equity. But I doubt it will have any great influence on overall lending and the housing market since the guidelines are already applied with great flexibility," Bruce, of Nordea Markets, said. (Reporting by Camilla Knudsen; Writing by Gwladys Fouche; Editing by Terje Solsvik and Alison Williams)