House price inflation in several Nordic economies is slowing, and in some cases sharply. In Sweden housing inflation fell to 6.7% in October, its slowest in four years. And in Stockholm, where prices have risen much more than the national average in recent years, inflation was just 3.6%. In Norway, house price inflation has fallen sharply, from 13.3% in January to just 0.7% in October. In seasonally-adjusted terms, prices have fallen in five of the last six months. This reflects a range of factors, including a steady pick-up in construction over the past couple of years and tighter mortgage lending regulations implemented in Norway in January. Housing inflation has also begun to decline in Iceland, where it has pushed headline inflation up significantly over the past 12 months or so. Nevertheless, we doubt that this is the beginning of a housing market crash in any of these countries.
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