THE PRICES of old dwellings in housing companies continued to decline in Finland in October.
Statistics Finland on Wednesday unveiled preliminary data revealing that the year-on-year drop in prices stood at 7.8 per cent in the largest cities and 4.1 per cent in other parts of the country, adding up to a nationwide average of 6.5 per cent.
Compared to the previous month, the prices declined by 0.8 per cent across the country.
Oulu recorded the most substantial drop in prices, with old dwellings losing on average 11 per cent of their value in the 12 months leading up to October 2023. Prices in Turku fell by 8.7 per cent and those in the capital region by 7.8 per cent.
Tampere proved to be the most resilient market, with prices falling by 5.0 per cent from the previous year. The city was also the only large city that registered a month-on-month up-tick in the prices of old dwellings in housing companies – one of 1.9 per cent.
Juhana Brotherus, the chief economist at Suomen Yrittäjät, on Wednesday predicted that the prices of old dwellings will receive a boost from the revisions that will be made to the transfer tax scheme at the turn of the year. With the government set to scrap the tax exemption granted to first-time home buyers at the start of next year, many are expected to sign the deed by the end of the year.
“The journey from first viewing to the bank to sign the deed takes at least a month. We will see an increase in sales figures for November and especially December, but January will again be brutally quiet due to the timing of purchases by the wave of first-time home buyers,” he wrote.
Brotherus revealed that he expects house prices to decrease by more than six per cent in 2023, marking the most significant year-on-year decrease in more than 30 years. Compared to the price peak witnessed in 2022, house prices have already come down by roughly 10 per cent.
“The start of next year will be difficult, but gradually low new residential production and especially the declining Euribor rates will lubricate sales chains across the country and elevate prices in growth centres,” he said.
Brotherus is familiar with the workings of the property market as a former long-time chief economist at the Mortgage Society of Finland (Hypo).
Aleksi Teivainen – HT