(Adds Nov housing data, quotes, background)
OSLO, Dec 5 (Reuters) - Norway’s growing household debt burden and persistently high property prices could threaten an otherwise strong economic trend, the Financial Supervisory Authority (FSA) said on Wednesday.
“A strong rise in interest rates, new international financial turmoil or other economic shocks could trigger a sharp fall in property prices and an abrupt slowdown in household demand for goods and services,” the agency said in a statement.
The average household now has debt amounting to 229 percent of disposable income, the FSA said, up from 224 percent a year ago despite restrictions on mortgage lending in recent years to designed to limit excessive borrowing.
“In order to ensure that the Norwegian economy is well prepared to face potential economic shocks, it is important that the capital adequacy levels built up by the banks after the financial crisis are not impaired,” the FSA said.
Separately, seasonally adjusted housing prices fell 0.5 pct in November from October, a real estate industry report showed.
On a year-on-year basis, prices were up by 2.0 percent in November, and since early 2011 they have risen by some 45 percent.
“Even though there has been a weak price development this autumn compared with before the summer, the level of activity has been stable for the whole of 2018,” Real Estate Norway Chief Executive Christian Dreyer said. (Reporting by Camilla Knudsen and Ole Petter Skonnord, writing by Terje Solsvik, editing by Gwladys Fouche and Angus MacSwan)