Blocks of flats in the neighbourhood of Kaleva in Tampere, Finland, on 3 October 2024. Calculations by Juho Keskinen, the chief economist at the Mortgage Society of Finland (Hypo), reveal that house prices in Finland have fallen to an all-time low when compared with wages. (Heikki Saukkomaa – Lehtikuva)
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HOUSE PRICES in Finland have fallen lower than ever before when compared with wages, reports Helsingin Sanomat.
Juho Keskinen, the chief economist at the Mortgage Society of Finland (Hypo), has compared disposable income to mean nominal house prices, finding that house prices are presently lower than during the recession of the 1990s.
There are notable differences within Finland, however.
Although house prices in the capital region have also decreased in recent years, the market is not quite as opportune for buyers as it is in other parts of the country. A comparison of house prices and disposable income indicates that house buyers in the region are presently in the same situation as at the end of the 1990s, Keskinen said to Helsingin Sanomat on Saturday. Finland had at the time emerged from the recession but had yet to experience the real estate boom of the 2000s.
“Also this of important because prices in the capital region rose to levels that are unattainable for many low and middle-income earners,” he reminded.
The situation is a consequence of both wage growth and house price decreases, according to Keskinen. In regions where house prices have risen only modestly for an extended period of time – namely, regions outside the largest population centres – the main determining factor has been wage growth. In Helsinki, Tampere and Turku, for example, house prices have seen more dramatic increases, as well as decreases, in recent decades.
Although the recent drops in house prices have garnered widespread attention, the drops are nowhere near as dramatic as in the 1990s, when houses depreciated by up to dozens of per cent in some regions.
In recent years, house prices have fallen roughly to the levels of 2017 in the capital region and almost to the levels of the financial crisis of 2008–2009 in other parts of Finland, Keskinen said to Helsingin Sanomat.
He does not expect the current market situation to last long, predicting a “clear turnaround” in house prices for next year.
Hypo is presently forecasting that house prices will fall by 2.5 per cent year-on-year in Finland in 2024 but rise by 2.5 per cent in 2025. In the capital region, the prices are expected to fall by four per cent this year and rise by four per cent next year.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
