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Norway houses prices overvalued: IMF

The Local
The Local - [email protected] • 12 Jun, 2014 Updated Thu 12 Jun 2014 09:31 CEST
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Norway's house prices are amongst the most over-valued in the OECD, the International Monetary Fund has warned as it launches its new Global House Price Watch.

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According to the IMF's survey of 51 OECD countries, only houses in New Zealand and Canada are selling at a greater divergence from their historic price-to-rent ratio, while houses in Norway were the seventh most expensive in comparison to average incomes. 
 
In a blog post on Thursday, IMF Deputy Managing Director Min Zhu  called for country's to take action to contain house prices or risk a future financial crisis. 
 
"Our research indicates that boom-bust patterns in house prices preceded more than two-thirds of the recent 50 systemic banking crises," he wrote. 
 
Here's a chart comparing Norway's deviation from historic price-to-rent ratios: 
 
 
 
And here's once comparing the relationship between house prices and average incomes: 
 
 
 

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The Local 2014/06/12 09:31

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