Saturday, June 1, 2013

Statistics Norway Calls The Housing Party Off?

In September last year I criticized Statistics Norway (SSB) for reckless behavior. I was more or less pissed at their forecast of around 30 % house price increase for the coming three years, because in my opinion it fed the overly rosy picture of Norwegian (1st and 2nd) home buyers and was helping to inflate a dangerous bubble. Well, a lot has changed since then:

It's hard to tell if they have decided to heed my advice, or if they have started to see some clouds in the sky, but I'd bet my money on the latter option. In just nine months SSB has moved from "Up, up, up!" to "Down, down, down.", when talking about the growth prospects.

By applying the same "linear extrapolation" that SSB presumably used for its Sep'12 forecast, to the rate of change between SSB's forecasts, you get an idea where we might be within the next nine months. But take into account that its latest forecast still assumes GDP growth of 3,0 %, 3,3 % and 3,2 % for 2014, 2015 and 2016, respectively, for Norway...