THE PRICES of old dwellings in housing companies continued to decline in Finland in March.
Statistics Finland on Wednesday published data indicating that the prices declined by 6.6 year-on-year in the large cities and by 4.2 per cent in other parts of the country, translating to a nationwide decline of 5.8 per cent.
Vantaa and Tampere recorded the most notable drops in house prices, 8.6 and 7.6 per cent, respectively. Prices in Turku, by contrast, fell the least, by only 2.4 per cent from the previous year.
Anu Rämö, a senior statistician at Statistics Finland, pointed out that the price development aligns with that witnessed in January and February: “Prices fell in all regions, more in large cities than other parts of the country,” she summarised in a press release.
Finnish real estate agencies brokered 29 per cent fewer sales in March 2023 than in March 2022, adding up to a drop of 33 per cent in brokered transactions for the period between January and March.
The prices of old dwellings fell by 5.8 per cent year-on-year in large cities and 4.8 per cent in other parts of the country in the three-month period. The development was driven particularly by the capital region, with the prices falling by 7.0 per cent in Vantaa, 6.2 per cent in Helsinki and 5.9 per cent in Espoo.
Rämö stated that one-room flats have been especially affected by the price development. In Helsinki, she highlighted, a studio in a block of flats costs presently about as much as it did four, to five years ago.
The sales of new dwellings in housing companies crashed by 71 per cent year-on-year between January and March. Their prices, however, decreased only moderately from the previous year, by 2.0 per cent.
The Bank of Finland reported that Finnish households drew down 1.2 billion euros worth of housing loans in March. While the total represents a drop of 690 million euros from the previous year, it was higher than in either January or February.
About 100 million euros of the loans were granted for investment purposes. The average interest rate on new housing loans crept up from the previous month to 3.9 per cent.
Juho Keskinen, an economist at the Mortgage Society of Finland (Hypo), described the mood in the real estate market as cautious and real estate sales as unusually sluggish.
“In January to March, sales were at their lowest level since the recession years of the 1990s, and the accelerating decline in prices is not over yet. Higher prices and interest rates are steering residents to cut back on their space needs because the square metres of your home cause a larger dent to your pocketbooks by largely defining interest costs and maintenance charges,” he commented.
Keskinen predicted that the market mood will not improve until interest rates level off toward the end of the year.
Aleksi Teivainen – HT