Newly built blocks of flats in Kivistö, Vantaa, in mid-2021. The Mortgage Society of Finland forecasts that house sales will decrease by about 10 per cent in the first half of 2022 due to, on the one hand, uncertainty linked to the war in Ukraine and, on the other, sluggish increases in house prices. (Mikko Stig – Lehtikuva)

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THE HOUSE MARKET in Finland will slow down by about 10 per cent in the first half of this year, forecasts the Mortgage Society of Finland (Hypo).

Hypo on Thursday stated that it expects house sales to decrease not only due to the uncertainty generated by the war in Ukraine, but also due to what are expected to be modest increases in house prices: 1.5 per cent in 2022 and 0.5 per cent in 2023.

With inflation and earnings rising at a higher clip than house prices, real house prices will decrease notably, according to Hypo.

While the prices of one-room flats may even decrease, the recent increase in the construction of small flats will be reflected in the prices of such houses also in the largest cities and population centres. The prices of larger flats are contrastively forecast to increase in and around Helsinki, Tampere and Turku.

Another factor with a negative impact on activity in the house market is the high number of houses in need of renovation.

Hypo predicted that owners in a number of municipalities will forgo fixing leaking roofs and cracked facades because the cost of renovation is higher than the amount renovation would add to the value of the house. In Savonlinna, for instance, around one in six houses in need of renovation will not be fixed.

House owners may also forgo renovation due to lack of occupants.

In Helsinki, Tampere and Turku, almost all houses in need of renovation will be renovated, according to Hypo.

Aleksi Teivainen – HT

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