Helsinki: Housing prices in Finland are expected to have the biggest drop this year since 1993, according to a housing market review conducted by Hypo, a credit institution specialising in the sector.
High interest rates, a big supply of new apartments, and a decline in demand caused by economic uncertainty have all contributed to the downward trend, Hypo said in a statement on Friday, adding that a similar trend was last observed 30 years ago, reports Xinhua news agency.
In 2023, the number of property transactions will decrease by one-third compared to 2022 and by one-fifth compared to 2019, the last pre-Covid year, the report said.
“High inflation and prolonged interest rate pressure will affect the current year’s price development more than was estimated at the beginning of the year,” said Hypo’s economist, Juho Keskinen, in the statement.
The report expects housing prices to fall by an average of seven percent across the country through 2023 and by 8 per cent in the Greater Helsinki area.
On the positive side, Hypo predicts housing prices to start rising moderately towards the end of the year, depending on changes on the demand side.
“The situation is expected to change next year when less new apartments will be built, the interest rates should stabilize, and demand is predicted to grow,” Keskinen said.