Banks: Rising house prices in Finland will slow down as the epidemic decreases, borrowing is limited

Banks: Rising house prices in Finland will slow down as the epidemic decreases, borrowing is limited

“People have been looking for more spacious houses when supply has been low by chance. We expect the opening up of societies to push household consumption from housing to other areas, which will slow the rise in prices. ” Las Olsen, Chief Economist of Danske Bank, commented on Friday.

The Nordic authorities are also expected to tighten regulation of the housing market. Pasi Kuoppamäki, Chief Economist of Danske Bank Finland, says that the Finnish government intends to limit the maximum amount of total household debt to 450 or 500 per cent of the gross year. This measure seems to have affected Norwegian house prices.

“While banks have a 10 per cent flexibility for new loans, regulation seems to be slowing down price rises in Norway. The debt ceiling seems to have been particularly affected in areas where prices have risen rapidly, such as Oslo, ”he said.

The debt ceiling may have a similar effect in Finland Jussi Pajala, CEO of Nordea Mortgage Bank.

“It has been discussed that the debt ceiling may limit the development of house prices, but it is not ruled out that it could cause the opposite trend, a falling market. It would not have good consequences,” he was quoted said At the press conference of Helsingin Sanomat on Friday.

Pajala also estimates that the ceiling could hinder labor mobility and reduce the opportunities for the younger generations to accumulate wealth.

On Friday, Nordea published its latest forecast for the Finnish housing market and considered that continued market demand would create pressure to increase prices in the second half of the year. The number of market transactions has increased significantly since last spring and is currently close to 7,000 per month, compared to 5,000-5,500 before the pandemic.

“Sales are unusually high,” he confirmed Juho Kostiainen, economist at Nordea. “Sales have previously been strong in the Helsinki metropolitan area and other growth centers, but now it is also good elsewhere in Finland.”

Statistics Finland’s data suggest that demand will remain high. Its consumer confidence index last month naked that nearly 17 percent of consumers are considering buying a house next year.

Demand has been particularly strong for detached houses. Subsequent price increases have been significant, about 15 percent, in Hyvinkää, Järvenpää, Kerava and Nurmijärvi.

“The rise in the prices of detached houses is a new phenomenon, because prices had been stable for the last 10 years,” Kostiainen said. “People are looking for space a little further away from growth centers. It does not mean that growth centers lose their attractiveness, but simply that migration flows spread to wider areas around the centers. “

Aleksi Teivainen – HT

Source: The Nordic Page

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