March 13, 2018 / 10:30 AM / a year ago

UPDATE 1-Norway's new home sales rise, regulation and rate hike loom

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OSLO, March 13 (Reuters) - The sale of new Norwegian homes rose by 1 percent year-on-year in February while housing starts rose by 40 percent, the Norwegian Home Builders’ Association (NHBA) said on Tuesday.

“We are now seeing a levelling off after new homes sales have fallen for 10 consecutive months,” NHBA Chief Executive Per Jaeger said, while adding that it was too early to conclude that the market had turned.

So far this year new homes sales are down 17 percent compared to the same period last year.

“We expect a turnaround could come after May or April, but it is still very uncertain,” Jaeger said, adding that ongoing revisions of mortgage regulations as well as expectations for a central bank rate hike could impact the housing market.

“In combination, these factors could lead to a period of further fall in home sales, and with less construction we could see prices spiking again,” he told Reuters.

The twelve-month rolling rate of home sale has fallen to 27,000 units from a peak of 35,000 early last year. (Reporting by Camilla Knudsen, editing by Terje Solsvik)

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