(Corrects headline to show 2014, not 2013)
OSLO, Jan 6 (Reuters) - Norwegian house prices could fall this year on a big supply overhang but the decline may be smaller than some predict with little chance for large scale, disorderly deflation, a real estate industry association reported on Monday.
House prices could drop by one to three percent on average this year as sellers, staying off the market during price falls in the second half of 2013, could dump their property on the market, boosting supply, Christian Dreyer, the head of EFF said.
House prices have fallen in four of the past six months, taking annual growth in December into negative territory for the first time since 2009, ending a five-year boom in the property market.
This came, however, after prices rose so high the IMF warned that they could be as much as 40 percent overvalued. Some housing analysts predicted prices could fall 10 to 20 percent compared with their peak in the middle of 2013, hitting everything from consumer demand to construction output.
“It’s highly unlikely that we’ll see a big drop in housing prices in 2014,” Dryer said. “In the first quarter we should see some growth in prices but we expect it to be more moderate than in previous years.”
Property prices grew by 4.9 percent on average in 2013 but much of that came in the first half of the year and prices in December were 0.6 percent lower than a year earlier.
In December alone, prices grew by 0.2 percent from the previous month on a seasonally adjusted basis, partially reversing November’s 0.9 percent decline. (Reporting by Camilla Knudsen; Writing by Balazs Koranyi)