The Norwegian lives in the leftmost house, next to blue house. The owner of the center house drinks milk, and cannot therefore be green house whose owner has coffee for a drink. The gren house is position 4 as it is to the left of the white one and there is no other place for a pair of houses to fit the given clues. Thus, the center house is red and the Brit lives there. The Norwegians house must thus be yellow. The Dane drinks tea and so doesn't live in the coffee-drinking green house. The Swede raises dogs so he is not the one who owns horses. The identity of the Blue house is hence still unknown.
The man in the centermost house is the Brit and drinks milk. The green owner drinks coffee. The Dane drinks tea and so does not live there. The one who smokes Bluemasters drinks beer. Because the German smokes Prince, we know now that the German does not drink beer. We established already that the Brit drinks milk, so he cannot smoke Bluemasters. Since the Norwegian smokes Dunhills, he can't do the Bluemasters/Beer combo either. And the Dane drinks tea, resulting in the Swede having the beer.
The owner of the yellow house (Norwegian) smokes Dunhill. The German smokes Prince. The on who smokes Blends, has a neighbor who drinks water, and the green one drinks coffee. Hence, the person in the white house does not smoke Blends. The Dane can't smoke Bluemasters, since he drinks tea and not beer, as deducted before. The Brit drinks milk, so Bluemasters are out for him. The Norwegian doesn't smoke the Bluemasters either, since he smokes Dunhills. And the German smokes Prince, not Bluemasters. The only option is that the Swede smokes Bluemasters. Therefore, the Swede drinks beer, concurring the result of the drinks-deduction.
The man who keeps a horse, lives next door to the Dunhill smoker, who is the Norwegain, so the owner of the blue house has a horse. The Norwegian smokes Dunhills, so he does not have birds. The Swede keeps dogs, so he can't own horses and live in the blue house. Whomever smokes the Bluemasters, doesnt own birds.
When we realize that the Swede smokes Bluemasters, drinks ber and keeps dogs, we know everything except the colr of his house. He doesn't live in the red one because he drinks beer instead of milk. Nor does he live in the green house, as he does not drink coffee. He is not in the yellow house either, due to the Dunhills, and since he doesn't own a horse he isn't the owner of the blue one. So, he lives in the white house.
The blue house and the green house are still unknowns the Dane must be in the blue one drinking tea, because he doesn't drink coffee: therefore, he can not be in the green one. We already know that the Brit is the owner of the red house and the Norewgian is in the yelow house. So we can put the German into the green.
Based on this, we have the German drinking coffee and smoking Princes in the green house. The Swede is in the white, smoking Bluemasters and drinking beer with dogs keeping thirsty frat-students away. The Norwegian is in the yellow house, getting lung cancer from Dunhills. The Dane is in the blue house drinking tea and grooming a horse. Since he has a horse, he can't have birds and therefore doesn't smoke Pall Malls, but Blends. The Brit is in the red house drinking milk.
Since the Dane, inside the blue house, smokse Blends, his neighbor must drink water. The house next door belongs to the Brit who already drinks milk. So the Norwegian on the other side must be the one who drinks water. We know what everyone smokes (but the Brit) who by default smokes Pall Malls, and hence also owns birds.
Since he owns the birds, the neighbor of the Blends smoker (who has cats) is the Norwegian, leaving only one outcome:
The German owns the fish.