In the rest of the country, house prices are expected to drop seven percent from the peak in 2022. Expectations in the capital region and other regions differ mainly because the rise in interest rates is expected to discourage home buyers, especially in residential areas. loans are higher than the national average, such as in the capital region.
The market has also been affected by the rise in energy and consumer prices and the general uncertainty caused by Russia’s war of aggression in Ukraine. For example, the average time it takes to sell an apartment in the capital region has increased by 50 percent from 60 to 90 days, which is about 10 days longer than the national average.
– The housing market has been hibernating this winter, Kostiainen summed up for Helsingin Sanomat.
Nordea said the latest housing market review that the prolonged period of low interest rates for mortgages created a “small bubble” in the investment housing market. The interest rate spike has burst the bubble, and the prices of one-room apartments have fallen more sharply than the prices of two-bedroom and detached houses.
Until recently, the prices of investment properties had clearly risen faster than rent not only in the capital region but also in Tampere and Turku.
Investors have already started to pass on rising costs to tenants according to lease agreements. In Helsinki, rents fell a year ago, but in new leases they have been increased by about three percent.
Finland’s most popular mortgage reference rate, Euribor 12, rose above 3.7 percent on Tuesday. Nordea, Finland’s second largest provider of mortgage loans, estimates that the interest rate will rise to around four percent this summer, before gradually starting to fall and falling to 3.15 percent in December 2024.
Jan von GerichNordea’s Chief Economist, pointed out Earlier last month, that the Finnish economy is more vulnerable to rising interest rates than many of its euro area counterparts, as almost all mortgages are tied to variable interest rates. Even after the recent upswing, only about a quarter of the new mortgages granted in the euro area have variable interest rates.
The Bank of Finland on Tuesday exempt data confirming the sudden slowdown in the housing market.
The value of new mortgage withdrawals in January was 847 million euros, which is 21 percent less than in December 2022 and 40 percent less than January 2022. The value of withdrawals was the lowest in 20 years, since monthly withdrawals were 810 million euros in January 2003.
About 80 million euros were withdrawn from the total amount for investment purposes. The average interest rate for new mortgages was 3.58 percent.
Withdrawals reached an all-time record of EUR 2,311 million in May 2008.
Aleksi Teivainen – HT
Source: The Nordic Page
Leave a Reply