THE MORTGAGE SOCIETY of Finland (Hypo) has revised up its forecast for house prices in 2020–2021.
Hypo on Friday published its most recent review of the housing market, forecasting that house prices in the capital region will increase by 3.0 per cent in 2020 and 3.5 per cent in 2021. The forecasts represent increases of two and one percentage points, respectively, from the review it published in August.
Prices in all parts of the country are expected to climb, instead of decrease, by 1.0 per cent this year and continue at the same clip next year.
Statistics Finland has reported that house prices in the capital region jumped by 5.2 per cent year-on-year in September. The prices fell by almost one per cent in other parts of the country, according to the preliminary statistics. While the month-to-month statistics are prone to rapid and unexpected swings, also market experts have estimated that the demand for houses is robust in the region, according to Helsingin Sanomat.
Hypo viewed that a decrease in supply is at least a partial reason for the hike in house prices. The number of houses entering the market has stayed about 15 per cent lower than last year for some time.
“Reasons for the anaemic willingness to sell are found at least in the risk groups, who – for a good reason – are avoiding house viewings and moving without an absolute need amid the epidemic,” said Juhana Brotherus, the chief economist at Hypo.
“Many people in working life also are uncertain about their actual housing needs: how large a part [of working life] will remote work become and how important factors will other characteristics of houses besides location be after the coronavirus crisis.”
Demand for houses, meanwhile, has remained strong as especially people in highly paid positions have been relatively unaffected by the crisis.
“Sustainable demand and decreasing supply are keeping prices on growth centres on a sharper-than-expected upward trajectory,” predicted Brotherus.
Aleksi Teivainen – HT