The decline in prices is further explained by the rise in interest rates, the solid supply of new apartments and the effects of prolonged economic uncertainty on the demand for real estate. For example, euribor interest rates are expected to remain close to the four percent limit and continue to raise the costs of mortgage borrowers until the end of the year, although the most dramatic jumps have already been seen.
The slowdown in the real estate market also affects the public finances, as income from the transfer tax is expected to decrease by 200 million euros in 2023, according to Hypo.
A Finnish credit institution specializing in housing saw that the additional reductions in mortgages are now, for the first time in a long time, a good form of saving. The situation still offers excellent opportunities for first-time home buyers as well.
“There are currently plenty of houses available to allow people to hang out and negotiate prices while they look for their own home,” the forecast says.
“What seemed like a constant rise in prices has stopped, but the majority of homeowners in growth centers are still “up” in terms of their housing investment. And even if you have to sell your current home at a loss, […] you can make a deal where you save more than you lose when you upgrade to a bigger home.”
Hypo revealed that it estimates that house prices will turn to a moderate rise at the end of the year, although the condition for the rise is a recovery in demand.
“The increase in demand, the sharp decrease in the number of new apartments and the decline in interest rates will support apartment prices next year,” it estimates.
It is predicted that the housing supply will shrink due to cyclical reasons, interest rates will decrease and housing prices will start to rise in urban areas as early as next year. The development is expected to increase housing prices by approximately two percent.
However, Russia’s war in Ukraine still creates significant uncertainty in interest rates, Hypo reminded.
Aleksi Teivainen – HT
Source: The Nordic Page
