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Norway's real estate market has raised concerns about the International Monetary Fund (IMF). The organization's report says that the rapid rise in house prices in the northern country poses a risk to financial stability, writes The Local.
"This acceleration in house prices should be limited by a combination of monetary, fiscal and structural policies aimed at increasing the supply of housing while curbing demand," the report said.
This is not the first time the IMF has expressed its concerns about rising house prices in Norway. They have already recommended several times that the authorities tighten the rules of mortgage lending.
Norwegian Finance Minister Jan Tore Sanner echoed the IMF's concerns.
"I share the concern about the strong growth in house prices, especially in Oslo and other major cities over the past year," he said in an interview.
However, Sanner does not believe that it is necessary to tighten regulation. He expects historically low interest rates to rise in the second half of the year, meaning that house price growth should naturally slow down.
Analysts at the IMF believe that, overall, Norway has coped well with the spread of the coronavirus and the subsequent economic crisis. They expect the Norwegian economy to strengthen by 3.2% in 2021. This is in line with the Bank of Norway's estimate (3.8%) and Statistics Norway's forecast (3.3%).
