A man having a cup of coffee at home in Espoo on 5 July 2023. Finnish home owners are widely unconcerned about the impact of high interest rates on the financial situation of housing companies, reveals a survey commissioned by Retta Isännöinti, a leading property management services provider in Finland. (Mikko Stig – Lehtikuva)
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A LARGE SHARE of Finns have hardly any financial buffers, and yet many are not concerned about the effect of rising interest rates on the finances of their housing company, reveals a survey commissioned by Retta Isännöinti, a leading property management service provider in Finland.
Almost half (45%) of the roughly 1,000 survey respondents estimated that their financial buffers are relatively or very limited.
Over 60-year-olds, the survey found, are most likely and 18–29-year-olds least likely to have solid financial buffers to protect themselves against economic challenges.
Anders Gylling, the chief operating officer of Retta Isännöinti, told Helsingin Sanomat on Friday that there may be two reasons for the limited buffers of young people: they have not had time to build up their buffers and they do not consider buffers necessary having grown up in the era of low interest rates.
The survey did not define what defines solid and limited buffers, meaning the respondents had to make the determination based on their own assessment. As many as 15 per cent of all respondents indicated that they are unable to assess whether or not they have financial buffers.
The Euribor rates used as reference rates for housing loans have spiked in the past two years, standing at about four per cent on Friday. Christine Lagarde, the president of the European Central Bank (ECB), on Friday said the ECB will not start lowering its benchmark rates in the “next couple of quarters” over concerns that inflation could accelerate in the near term as high energy prices are eliminated from the year-on-year comparisons.
Gylling estimated that especially young mortgage borrowers may be challenged if interest rates remain high for a long time.
“Young people tend to have large housing loans, and if they’re spending an ever larger share of their money on housing, there’s less left for other facets of life,” he commented to the newspaper.
Finns, the survey also finds, are largely unconcerned about the financial standing of housing companies. Over four-fifths (81%) of the respondents stated that they are not concerned about the financial situation of their housing company, such as solvency and access to financing, and another almost 60 per cent that they are not concerned about the effect of rising interest rates on their housing company.
Gylling gauged that people are more concerned about their personal finances than the finances of their housing companies because the housing company is perceived as a separate instance.
“If a housing company has taken out debt against the shares of residents, for some reason it isn’t perceived in the same way as a personal loan,” he remarked to Helsingin Sanomat. “Even though the money comes out of the same pocket.”
Young people, again, were the least concerned about the situation. Gylling viewed that the carelessness may stem partly from the fact that young people seldom participate in decision making in housing companies, an issue that could be tackled by adopting digital tools for participation, he believes.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
