Norway’s Prime Minister Erna Solberg warned of “insecurity” gripping the nation’s housing market as deflating prices coincide with a rise in the jobless rate in Scandinavia’s richest economy.
“What we’re seeing now is insecurity in the housing areas,” Solberg said in a Jan. 29 interview at parliament in Oslo. “We have to look into what the reasons are for this. We know that the activity in construction is a little bit lower than anticipated earlier.”
Norwegian house prices have dropped 5 percent since August as the market retreats from a half-decade-long real estate boom. The $500 billion economy is slowing as consumers service record debt burdens and as joblessness climbs. Though unemployment remains well below the euro zone’s 12.1 percent, Norway’s registered jobless rate rose to 3 percent in January, the highest since February 2011, the Norwegian Labor and Welfare Service reported today.
“There has been a tendency for an increase in the unemployment figures in Norway since August,” Solberg said.“We need to see what the reasons are for the unemployment figures before we can answer if we need any” changes in fiscal policy, she said. The government is due to publish a supplement to its budget proposal in May.