Nordea predicts that housing prices in Finland will continue to decline this year but are expected to increase by 1.5% next year, with ongoing challenges due to the Middle East conflict impacting demand.
According to Nordea's housing market report, housing prices in Finland are expected to fall this year before seeing a rise of 1.5% in the next year. This forecast indicates significant regional variability, as areas experiencing population decline are likely to continue seeing price drops. The forecast also underlines a market shift where larger apartments will experience price increases before smaller units, which are currently oversupplied.
The report's economist, Juho Kostiainen, notes that the sluggish performance of the Finnish economy is contributing to the ongoing price decline. Currently, the average time to sell a property is over four months, reflecting a slower market activity. Kostiainen stresses that measures need to be taken to boost sales, suggesting a temporary reduction in the required down payment for homebuyers to 5%, a level currently allowed for first-time buyers.
Moreover, Kostiainen warns that prolonged conflicts in the Middle East could further dampen housing demand, indicating that external geopolitical factors also play a role in the local housing market dynamics. As the situation evolves, it will be important to monitor both economic conditions and international events for their impact on the Finnish housing sector.
