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Ms. Nan Geng
House prices in many advanced economies have risen substantially in recent decades. But experience indicates that housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability. Therefore there is a need to monitor house prices and assess whether they are sustainable. This paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors. The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.
International Monetary Fund. European Dept.

valuation gap is gauged empirically in the context of a cross-country panel analysis of long-run fundamental determinants of house prices using data from 20 OECD countries . A. Introduction 1. House prices in Norway have risen strongly over the past two decades . ( Figure 1 ). Norway has seen a long housing boom since the mid-1990s apart from a brief and mild downturn during the global financial crisis, with house price inflation exceeding income growth by a wide margin. While real house prices have also been up strongly during the same period in the majority of

International Monetary Fund. European Dept.

. Given the importance of the housing market to both financial and macroeconomic stability, it is essential for policymakers to monitor the extent to which house prices deviate from economic fundamentals. This paper examines various factors driving the uptrend in house prices, with a particular focus on institutional and structural factors. The extent of a possible valuation gap and the role of structural polies in shaping house price development are gauged empirically in the context of a cross-country panel analysis of long-run fundamental determinants of house prices

International Monetary Fund. European Dept.

Growth in Norway (Thousand persons) Sources: Statistics Norway and Fund staff calculations. Employed Persons: Immigrants and Non-Immigrants (Cumulative change in thousand persons since 2004 Q4) Sources: Ministry of Finance, Statistics Norway and Fund staff calculations. 4. The housing market has shown signs of cooling . House prices stabilized in mid-2013 although staff estimates suggest a substantial overvaluation (the average estimate is roughly 40 percent) in spite of a slight reduction in the valuation gap in 2013. A house price

International Monetary Fund. European Dept.
This Selected Issues paper elaborates findings and discussions of 2013 Cluster Consultation Nordic Regional report. The countries have close economic and financial ties and face some common challenges and shared risks, such as large banking sectors and high household debt. The economic performance of the four continental Nordic economies (Denmark, Finland, Norway, and Sweden—Nordic-4) ranks among the advanced economic development circle. It is analyzed that the large Nordic banking systems support relatively high levels of private sector debt. House price developments in the Nordic-4 pose a risk to broader macroeconomic stability in the context of strained household balance sheets.
International Monetary Fund. European Dept.
This paper discusses the oil economy, outlook, and risk for Norway. Growth has continued to slow in the mainland economy. At the start of this year, oil prices had dropped by roughly 60 percent from their peak in June 2014 to less than US$40 a barrel. The labor market is feeling the sting of the oil price crash. The krone has weakened substantially along with the decline in oil prices. However, a modest recovery should take root next year. Mainland economy growth should be about 1 percent this year and pick up to close to 1¾ percent in 2017.