Ilkka LehtinenA retired actuary from Statistics Finland told Helsingin Sanomat that the forecast may be too cautious.
According to him, the sale of apartments in old housing associations increased by 49,000 units in the first three quarters of the year, which corresponds to the level of 2019, but was approximately 14,000 sales less than the first three quarters of 2021. The annual total should remain below 70,000, which he says is a drop of 13,000 compared to 2021.
“Towards the end of the year, the number of stores will decrease, and it doesn’t look good at the beginning of next year either. This means that the number of stores will clearly decrease next year as well,” he analyzed. “It seems that market activity will freeze quite clearly next spring and prices will decrease to some extent. What happens after spring is another story.”
Lehtinen therefore expects the housing market to turn into a buyer’s market in 2023.
“If there is no demand – people don’t want or dare to buy – it naturally leads to a drop in prices under normal circumstances. The situation is currently good in the sense that people have jobs, and we won’t see forced sales like in the 1990s,” he told the newspaper.
Hypo believes that the drop in prices will remain a short-term phenomenon, which is expected to return to the rise in 2024, when the rise in interest rates stops and construction slows down amid economic uncertainty. However, Lehtinen reminded that making long-term forecasts of the housing market is challenging.
“It depends entirely on how the Finnish, European and global economies fare at the end of next year,” he said.
“It seems to be a refreshing injection, Hypo’s prediction may well be correct. But in this global situation, it is very difficult to start predicting what the situation will be like then.”
Teemu LyytikäinenA senior researcher at VATT’s Institute of Economic Research refused to comment on the forecast, but estimated that house prices will probably decrease in 2023.
“Prices are determined based on the combined effect of supply and demand. When interest rates rise, it reduces the demand for housing. Interest rates are an important factor that moves housing prices, and when interest rates rise, prices fall, he summarized.
Aleksi Teivainen – HT