An electrical closet in Helsinki on 28 September 2021. (Antti Aimo-Koivisto – Lehtikuva)


ALMOST 60 PER CENT of Finns are worried about the effects of soaring energy prices on their housing costs, reveals a survey commissioned by Nordea.

Nordea on Monday reported that more than one-quarter of the over 1,000 survey respondents reported that soaring energy prices have already made it more challenging for the to cope with housing costs.

Statistics Finland in September reported that the maintenance costs of properties increased by 2.1 per cent year-on-year in the second quarter of the year. The recent jumps in oil, electricity, district heat and renovation service prices could accelerate the rise in housing costs notably at the end of the year, according to Nordea.

“Single-family home occupants will see the rise in energy prices directly in invoices from energy utilities, and housing company occupants will face an unpleasant surprise no later than in next spring’s shareholder meeting, as maintenance charges may have to be raised,” predicted Juho Kostiainen, the chief economist at Nordea.

The survey indicates that a switch to more environmentally friendly heating system has been either planned or carried out in as many as 28 per cent of houses in the past five years – a phenomenon that has been driven by the rise in energy prices, concerns about the climate crisis and support measures adopted by the government.

The climate crisis, for example, has moulded the future housing expectations of one in two Finns.

“An ecological heating system, energy-efficient construction method and good public transport connections are regarded as the most important characteristics for climate. Energy solutions may become crucial for housing costs and the overall appeal of a house going forward,” analysed Kostiainen.

He estimated in a press conference that the fact that inflation is picking up may not bode well for mortgage borrowers, as it is not expected to lead to the kind of wage increases that make mortgage repayments easier.

In the 1970s, for example, interest rates stood at roughly 10 per cent and inflation at up to 15–20 per cent. “Real wages rose by 3–4 per cent at the same time. This kind of rise in real wages isn’t currently on the horizon,” he was quoted as saying in the press conference by Helsingin Sanomat.

The survey found that nearly three-quarters (73%) of mortgage borrowers have prepared for rising interest rates by hedging, saving or investing.

Nordea also estimated that the real estate market will remain lively, judging by the record number of approved housing loan applications. The service provider itself granted 13 per cent more housing loans than last year in September.

The most dramatic rises, however, should be in the rear-view mirror.

Nine per cent of 18–34-year-old respondents revealed that they have moved to a larger house during the coronavirus pandemic. Another 16 per cent viewed that they would require a larger house if remote work proves a more permanent phenomenon.

“Young people have emphasised the need for a larger house. Many have noticed that it isn’t nice to work remotely in a small studio,” said Kostiainen.

“Especially younger, under 35-year-old families with children who haven’t necessarily put down roots in their current locality are ready to pick up their bags and move,” added Jussi Pajala, the chief executive of Nordea Mortgage Company.

Kantar TNS interviewed more than 1,000 18–79-year-olds for the survey in November.

Aleksi Teivainen – HT