A real estate agent hosting a viewing of a flat in Kallio, Helsinki, last summer.House prices will fall as sharply as used car prices, and the decline in the prices of single-family houses may continue for another twenty years, chief executive Jaakko Sinnemaa states in the annual review of Asuntosalkku Oy.

The enterprise group operates in the real estate market through Vuokraturva and Myyntiturva.

Asuntosalkku Oy expects the volume of real estate transactions to remain close to the levels of last year, but urges buyers to brace themselves for price developments similar to those in the motor vehicle trade.

“With respect to price developments in the real estate market, we are edging closer to the logic of car trade especially in single-family houses but, in many ways, also in flats: the higher the price of the house you buy today, the more the price will fall in the near future,” Sinnemaa writes.

“The price decline will be particularly sharp in the first couple of years and slow down as your house gets older. You can escape with the smallest losses by buying a roughly twenty-year-old functional house with a solid floor plan that meets the demands of as large a group [of buyers] as possible and that can be used for a couple of years without worrying too much.”

The forecast for old and small houses in growth centres is relatively stable, according to Asuntosalkku Oy.

“It is our opinion that there will be pressure to lower both the rents and prices of new houses also in growth centres, barring a couple of exceptions. Of course, it may be that the prices remain close to their current levels due to fiscal stimulus. There will naturally be some exceptions also in old houses, [in the form of] pressure to lower prices,” Sinnemaa views.

Juha-Pekka Raeste – HS
Aleksi Teivainen – HT
Photo: Maria Halkilahti / HS