Finnish housing market had its biggest slump since the pandemic, with economists saying the trough isn’t in sight yet amid plummeting transaction volumes.
(Bloomberg) — Finnish housing market had its biggest slump since the pandemic, with economists saying the trough isn’t in sight yet amid plummeting transaction volumes.
Prices of old homes in Finland fell by 7.4% in May from the same period last year, the biggest decline since at least January 2021, data from Statistics Finland showed on Thursday. The volume of transactions with old flats and terraced houses through real estate agents declined 29% in the same period, it said.
Finland’s housing market only had modest gains during the pandemic that saw a steep price rally in its Scandinavian peers, yet it is now increasingly echoing worries seen in Sweden where the rising borrowing costs triggered a 15% decline in the value of homes. Earlier this month Finland’s Sato Oyj, whose main owner is Swedish landlord Fastighets AB Balder, saw its credit ratings cut to junk at Moody’s Investors Service.
Read More: Sato Cut to Junk Rating as Swedish Real Estate Woes Hit Finland
The statistics in the housing market are “gloomy,” said Juhana Brotherus, chief economist at Suomen Yrittajat, an organization representing small and medium-sized enterprises in Finland. After a “surprisingly large” slump in prices, it may take a whole year until the trend turns as buyers and sellers have a large difference in their views on prices, Brotherus said in a Twitter post.
The capital region of Helsinki led the slump with a 9.5% decline, the office said.
“The prices in growth cities are still weighed down by the abundant housing supply and investors’ panic, while in smaller cities and sparsely populated areas, the demand for housing is weak, regardless of housing type,” Juho Keskinen, an economist with Hypo, the Mortgage Society of Finland, wrote in a note.
The statistics in Finland reflect “a historic misery of the housing market,” Keskinen added.
Read Also: Sweden’s Property Crunch Worsens as Another Firm Cut to Junk
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