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Norway regulator says house price growth causes "unease" -report
August 6, 2014 / 7:21 AM / 3 years ago

Norway regulator says house price growth causes "unease" -report

OSLO, Aug 6 (Reuters) - Norway’s accelerating house price growth are giving cause for “unease” and some banks are loosening lending standards which may need to be addressed, the head of the financial regulator told business daily Dagens Naeringsliv on Wednesday.

“Household debt is still rising more quickly than disposable income,” Morten Baltzersen, the head of the Financial Supervisory Authority (FSA) told the paper.

Norwegian property prices are rising once again after a dip late in 2013 and growth could accelerate further.

Prices were up 2.6 percent in July compared with a year earlier and the annual growth rate could potentially pick up to 6 percent, defying expectations at the start of the year for fall, Real Estate Norway said on Tuesday.

The IMF last year warned that real estate in Norway could be as much as 20 percent overvalued and regulators have tried for years to cool the market with measures that included requiring bigger downpayments from buyers and forcing banks to hold more capital.

“(The growth rate) may indicate that banks have eased their lending standards somewhat and that they have increased their ambitions for growth in the home mortgage market,” Baltzersen said. “The FSA monitors the development and is considering measures that can contribute to moderating the growth in household debts.” (Reporting by Terje Solsvik)

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