Aerial image of Lauttasaari, Helsinki. LEHTIKUVA

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The Finnish housing market experienced a notable upturn in April 2024, with a significant rise in both transaction volumes and property prices, according to the latest real estate market overview by the Real Estate Agency Central Association (Kiinteistönvälitysalan Keskusliitto, KVKL). The positive trend was highlighted by an increase in old and new home sales across the nation.

In April, the total number of residential transactions reached 4,207, marking a 10% increase compared to the same month last year.

This included 4,044 transactions of old homes, showing a 10.7% year-over-year increase, and 163 new home sales, despite a slight decline of 4.1%. The broader data also captured 154 vacation home sales, 95 plot transactions, and 309 other real estate exchanges, such as commercial spaces and parking lots, totaling 4,765 transactions—an 8.7% increase from April 2023.

"The real estate market traditionally picks up as we approach summer. This April, however, marked a significant turnaround, not seen since the beginning of 2022, when compared to the same month in the previous year," said Tuomas Viljamaa, CEO of KVKL.

The increase in transactions was particularly robust in Tampere, Jyväskylä, Kuopio, and Oulu, although the capital region still lagged slightly behind in its recovery. Viljamaa noted that the reduction in transfer tax for this year might have also contributed to the revival of the housing market.

Property prices, which had been on a downward trend due to rapid interest rate hikes, have begun to stabilize and even increase slightly. For instance, used apartment prices in large cities outside the capital region have risen by 1.9% since the beginning of the year, with Turku seeing an 8.9% increase in average square meter prices.

Moreover, the market dynamics have changed with sales periods shortening significantly. For example, the average time to sell row houses in the capital region dropped by 20 days, and detached homes saw an average reduction of 28 days in their sales time.

Despite the recent uplift, the market levels remain below the five-year average for April, suggesting that the market might still be recovering from previous lows. However, the current trend is promising, with a gradual return to pre-pandemic activity levels expected.

Viljamaa also highlighted potential regulatory adjustments that could further stimulate the market, particularly advocating for the extension of maximum mortgage repayment periods back to 35 years, which had been capped at 30 years last summer.

The revitalization of the housing market is seen as a positive sign for the broader Finnish economy, suggesting increased consumer confidence and a reinforcing cycle of investment and growth in the real estate sector. As market conditions continue to evolve, stakeholders remain cautiously optimistic about the sustainable recovery of the housing market.

HT

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