August 7, 2018 / 10:15 AM / in a month

UPDATE 1-Norway's new home sales edge up in June after 14-month decline

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OSLO, Aug 7 (Reuters) - The sale of new Norwegian homes rose by 2 percent year-on-year in June after 14 consecutive months of decline, while housing starts fell by 8 percent, the Norwegian Home Builders’ Association (NHBA) said on Tuesday.

Year-to-date, new home sales are down 9 percent, while the last 12 months’ sales are down 21 percent from the previous 12-month period to 26,383 units.

“It’s too early to say that sales are picking up based on one month of marginal growth after so many months of decline,” said economist Nejra Macic at Prognosesenteret, which handles the data for the NHBA.

The prospect of interest rate hikes, in combination with an increased supply of new homes and lower population growth, could curb sales and limit the rise in overall housing prices.

“A comeback in new homes sales in the short run is very uncertain, we probably have to wait until 2020 when we expect the supply of new homes to fall significantly based on the recent decline in housing starts,” Macic said.

Housing starts are down 14 percent so far this year. During the last 12 months the level has fallen by 10 percent to 28,762 units. (Reporting by Camilla Knudsen, editing by Terje Solsvik)

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