House prices in Finland to decline in 2023 for the first time since 2015
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Loading... - Marcel Fabre
- 17 Oct 2022
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House prices in Finland will start declining at the end of this year and decline next year for the first time since 2015, predicts the Mortgage Society of Finland.
Hypo on Friday stated in its most recent real estate market review that the market is facing considerable headwinds in the form of rising interest rates and consumer prices and the waning of the injection of energy given by the remote-work boom.
House prices, it predicted, will creep up by 1.5 per cent this year due to a strong start to the year but drop by 0.5 per cent next year.
The upbeat employment situation and the financial buffers built up by households are the main factors supporting the market from the effects of rising interest rates, eroding purchasing power and the scrapping of support mechanisms introduced due to the pandemic. The employment situation taking a turn for the worse could send house prices into rapid decline.
“If the economy slows into a deep recession and labour markets stagnate, it will be a frosty time for the house market,” said Juhana Brotherus, the chief economist at Hypo.
Real house prices, meanwhile, will decrease irrespective of the employment situation because inflation and pay rises are expected to outstrip the increase in rents and real estate prices in the coming years.
Hypo also forecast that house prices in the capital region will this year develop at a more sluggish pace than in other parts of the country for the first time since 2008, sliding by a bit over one per cent in the coming six months. The year-on-year development, though, will remain positive due to a strong start to the year in the region. Read More...
