Among Finland’s largest cities, prices fell the most in Oulu, Helsinki and Vantaa, and the least in Tampere and Turku.
“As expected, the fall in apartment prices continued in January. The decline has now wiped out the gains made during the coronavirus pandemic, and the decline is likely to continue in the coming months. tweeted Joona Widgrén, economist from OP Financial Group.
On Thursday, Widgrén revealed in his blog post that apartment prices fell slightly faster than the expectations of Finland’s largest mortgage lender.
“In the statistics of 2015, this was the weakest month in terms of sales volume both in the capital region and in the entire country. The sale of apartments has continued to be muted. Of course, you should remember that January is typically the weakest month [of the year] for the sale of apartments,” he wrote According to Helsingin Sanomat.
Nordea and the Bank of Finland also commented on the real estate market last week.
Bank of Finland reported Last week, the value of new mortgage withdrawals rose to €847 million in January, the lowest monthly total in 20 years. Juho KostiainenA Nordea economist revealed that the financial services provider expects house prices to fall 10 percent from last year’s peak before rebounding.
The background of the slowdown is general uncertainty and the rise in reference interest rates. Finland’s most common mortgage reference rate, the 12-month Euribor, is expected to rise by another 0.2 percentage points to around four percent by mid-2023.
Widgrén noted on Thursday that sliding prices can create a cycle where buyers who expect the downtrend to continue end up prolonging the recession.
OP does not expect the market to pick up significantly in the near future.
Widgrén confirmed that it will take time for housing prices to return to growth: “A small recovery may occur when the worst fears of the crisis winter recede and the uncertainty about interest rate increases fades. We will probably have to wait for a clearer turnaround until we have adjusted to the rise in interest rates, wages have increased and compensated for inflation, and the economic outlook has started to brighten.
However, a repeat of the boom caused by the pandemic is not on the horizon.
“Sales volumes will return to their normal level gradually without a particularly significant or sudden recovery. This normal does not mean the numbers of 2020 and 2021, but I think we would rather return to the level before them, Widgrén wrote.
Aleksi Teivainen – HT
Source: The Nordic Page