Cranes towered over a construction site in Pasila, Helsinki, on 12 February 2024. The Bank of Finland has revealed that Finnish households took out only about 920 million euros in new housing loans in February, setting an over 20-year low for the month. (Jussi Nukari – Lehtikuva)

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HOUSE SALES remained sluggish in Finland in February.

The Bank of Finland on Tuesday revealed that the drawdowns of new housing loans added up to around 920 million euros in February, marking a drop of 60 million euros from the corresponding month in 2023. Compared to January, however, the drawdowns of new housing loans picked up by almost over 110 million euros.

Buy-to-let housing loans accounted for 95 million euros of the monthly total. In February, regular housing loans came with an average interest rate of 4.37 per cent – marking an increase from the previous month – and buy-to-let housing loans with an average interest rate of 4.53 per cent.

The drawdowns of new housing loans for the month have not been as low since 2002, Antti Hirvonen, an economist at the Bank of Finland, highlighted to Helsingin Sanomat. Finnish households, he revealed, drew down roughly 750 million euros in new housing loans in February 2002.

The all-time record for new housing loan drawdowns, roughly 2.3 billion euros, dates back to May 2008.

The Bank of Finland reported that Finnish households had 106.2 billion euros in outstanding housing loans in February, a drop of 1.4 per cent from February 2023. The stock of buy-to-let housing loans, meanwhile, stood unchanged at roughly 8.6 billion euros.

The sluggish market is reflected also in statistics published by the Federation of Real Estate Agency (KVKL). KVKL reported last month that the number of sales brokered by real estate agents fell sharply from the previous year February, despite improving from what had been a historically slow January.

Construction companies and real estate agencies reported a total of 3,155 sales of old dwellings to the federation’s price monitoring service, signalling a drop of 18 per cent from the previous year. The sales of new dwellings, meanwhile, plummeted by 52 per cent year-on-year to 107.

Prices and sales times were steady, however.

“In February, the 12-month Euribor was rising moderately and the weak outlook for the public economy and political strikes have hit consumer confidence. This is concerning because we would need more confidence in future in all sectors,” commented Tuomas Viljamaa, the managing director of KVKL.

He added that the market is should pick up in the near future given that forecasts for interest rates “continue to point down” and inflation has been brought “under control,” conditions that should enable monetary authorities to start lowering benchmark rates.

In January, the number of old dwellings sold stood at 2,688 and that of new dwellings at 83.

Aleksi Teivainen – HT

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