HOUSE PRICES In Finland, next year the rate will decrease, which has not been seen since 1995, predicts the Mortgage Association.

Hypo on Friday was revealed that it estimates that apartment prices will fall everywhere in Finland in 2023. Prices are predicted to fall three percent in the capital region and two percent in the rest of the country, as consumer reservations slow down the sale of apartments to pre-pandemic levels.

The slowdown is mainly due to the increase in housing costs due to the sharp, inflation-driven rise in interest rates. Consumer prices have recently risen the fastest since the 1980s, when interest rates rose to the level of early 2009. According to Helsingin Sanomat.

Juho KeskinenHypo’s economist stated to the newspaper that the change is significant in light of the development of the housing market over the past decade – especially the culmination experienced during the coronavirus pandemic.

“There is a kind of apathy in the housing market right now that we haven’t seen since the financial crisis,” he wrote. market overview.

However, he added that the drop in house prices is expected to be quite short-lived. Prices are predicted to go back up as soon as 2024, when interest rates stop rising and construction slows down.

“We are not predicting the collapse of the housing market or the gloom of the 1990s,” he assured Helsingin Sanomat and reminded that the drop in prices is understandable after continuous growth. “A sharp rise in prices is by no means desirable. It is normal that the decline has occurred after the market has been rising for more than 10 years.

Although prices are predicted to fall especially in the capital region, home owners and mortgage borrowers there do not have to worry about the value of their homes, as growth in the capital region and other urban areas is expected to continue. With economic uncertainty and at the same time construction slowing down, apartment prices are expected to rise in the long term.

The rising longer-term trend is also supported by employment growth and reasonably high business confidence.

“The economic support brought by record high employment has never been so critical for the housing market,” Keskinen said.

The prices of studio apartments have already started to fall sharply after the boom in interest-free and real estate investments. When there are a lot of studios under construction, their prices can still fall faster than larger houses.

– Strong increases often lead to strong decreases, and the decrease in the prices of small apartments is a sign of healthy and even welcome development. New houses are built for single people and students, whose threshold to buy a first home will decrease as prices cool down, Keskinen said.

“Investors’ hibernation offers good opportunities to negotiate prices for people in the market for small houses.”

However, no House Type is immune to falling prices.

The prevailing situation drags down the prices of large single-family houses that are heated with electricity, as the much-reported rise in energy prices has made many people pay attention to operating costs. Although the sale of single-family houses fell by about 20 percent in the spring from a year ago, the worst is yet to come, Keskinen believes.

“The marketability of electricity-hungry large apartments is deteriorating and the price trend is worrying, while energy-efficient pioneers stand out favorably.”

Aleksi Teivainen – HT