Housing prices to fall and rents to rise: PTT
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Loading... - Leticia Campana
- 16 Feb 2023
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Finnish economic research institute, Pellervo Economic Research (PTT), has predicted that housing prices will fall and rents will rise in 2023. However, the institute has also said that the market is expected to recover in the latter half of the year, and that there is no risk of a downward spiral.
PTT predicts that the uncertainty in the economy and the rising interest rates will bring housing prices down this year, while rents will increase at a faster rate.
However, there is no sign of an imbalance in the housing market that could lead to a downward spiral or pose a risk to the economy. At the end of the year, the housing market is expected to recover, but the average prices of old apartments in apartment blocks are likely to fall by 2.5% across the country.
"Lows will occur in the first half of the year, and prices will begin to rise again in the second half of the year as the housing market recovers from the shock caused by the energy crisis and rising interest rates," said PTT economist Veera Holappa.
The forecast estimates that the bottom of the household's desire to purchase homes is starting to be seen. As the positive news begins to trickle in from the economy, the pent-up demand for home buying is expected to be released. The average 12-month Euribor rate is expected to be 3.5% according to the forecast, and the price of energy is expected to return to its previous levels, decreasing from the peak it reached last year.
This will increase consumer confidence, and home buying is expected to pick up in the spring, but the pre-decline price level will not be reached in 2023. For example, in Helsinki, the prices of old apartments in apartment blocks are expected to fall by 3%, and in Tampere, they are expected to fall by 2%.
PTT's forecast examines the development of old apartment block prices, market rents, and ARA rents in the largest cities in 2023. Read More…
