Norway’s tightened mortgage regulations, in place since the start of the year, are working as planned and do not need to be repealed, Prime Minister Erna Solberg told Reuters on Tuesday.
The cost of buying a home in Norway hit an all-time high in early 2017 but have since fallen, triggering fears among some investors of a sharper downturn that could hurt the overall economy.
“What we’re seeing now is a normal adjustment of the housing market after years of rising prices,” Solberg said on the sidelines of a news conference.
“I see no need to alter the regulations. What we have in place is working pretty well at the moment and has helped put breaks on prices,” she added.
The Norwegian crown currency, trading at around 9.90 to the euro, is near its weakest level in nine years as investors express increasing reluctance towards risks in the housing market.
“We now have a weaker crown level, and thus a stronger stimulus for export industries, than our actual economic growth would normally indicate,” Solberg said.
“It may be that people’s view of the Norwegian economy has yet to catch up with how much stronger it has actually become, and it may also be that uncertainties over the housing market are having an effect,” she added.
DNB, Nordea and Danske Bank are among Norway’s top mortgage lenders. (Reporting by Joachim Dagenborg, writing by Terje Solsvik, editing by Gwladys Fouche)