February 3, 2017 / 10:31 AM / a year ago

UPDATE 1-Norway's January housing prices rise 12.4 pct year-on-year

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OSLO, Feb 3 (Reuters) - Norwegian seasonally adjusted housing prices rose by 0.6 percent to a new record level in January from December, a real estate industry association said on Friday.

On a year-on-year basis, prices rose by 12.4 percent in January, down from 12.8 percent in December, Real Estate Norway said. Unadjusted prices rose by 2.8 percent in January from December.

The rapid growth in Norway’s housing prices is widely seen as a factor reducing the chance of a cut in central bank interest rates.

“We expect the 12-month growth rate to decline quite a bit from current levels during 2017. Not necessarily in February, but we should see a gradual decline to well-below 10 percent during the year,” Chief Executive Christian Dreyer told a news conference.

The boom in housing prices has also resulted in sharply higher demand for new homes from builders like Veidekke and Selvaag Bolig.

Norway recently tightened mortgage lending regulations in a bid to rein in prices.

The housing data was compiled by Real Estate Norway, FINN and Eiendomsverdi. (Reporting by Camilla Knudsen, editing by Terje Solsvik and Joachim Dagenborg)

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