HOUSE PRICES in Finland continued to fall sharply in February, according to preliminary data published by Statistics Finland.
The data reveal that the prices of old dwellings in housing companies decreased by 5.2 per cent year-on-year, driven particularly by drops in Helsinki, Vantaa and Espoo. The prices fell by 6.1 per cent in the capital region and by 5.5 per cent in the six largest cities, but by 4.4 per cent outside the six largest cities.
Compared to January, however, the prices crept up by 1.2 per cent nationwide.
Pasi Kuoppamäki, the chief economist at Danske Bank, reminded in a tweet that the real estate market tends to pick up in the spring, a fact that explains the moderate month-on-month increase in prices and volumes.
“Compared to the year before, activity remains muted and consumers have very little purchase plans,” he added.
Statistics Finland also reported that the number of old dwellings in blocks of flats and terraced houses sold through real estate agencies decreased by nearly a third from the previous year in February.
“The dell in house sales continued in February, and the house markets continue to look for a new direction under the burden of elevated interest rates and nagging inflation. The sales of old dwellings in housing companies are missing around 2,000 sales every month compared to the normal level before the crises,” said Juho Keskinen, an economist at the Mortgage Society of Finland (Hypo).
He also highlighted that consumers are more reluctant to buy a house than ever before in the past seven years.
“Hopefully we have passed the low point in confidence, but confidence in the future will only be restored gradually once inflation and interest rates start settling,” analysed Keskinen.
The more than year-long surge in interest rates has had a tangible impact on house sales. The Bank of Finland, for example, has revealed that the drawdowns of new housing loans decreased by 40 per cent year-on-year to 847 million euros in January.
Aleksi Teivainen – HT
