Finland's housing market faces steepest price decline since 1993

According to a housing market review carried out by Hypo, a specialized credit institution, it is anticipated that Finland will experience its largest decline in housing prices this year since 1993.

Hypo attributed this downward trend to various factors including high interest rates, a significant influx of new apartments, and reduced demand due to economic uncertainty. They noted that a similar trend was last observed three decades ago. The review also predicted a decrease of one-third in property transactions in 2023 compared to the previous year and a reduction of one-fifth compared to 2019, which was the last year before the Covid-19 pandemic.

Hypo’s economist, Juho Keskinen, stated that high inflation and persistent pressure on interest rates will have a greater impact on this year’s price developments than initially estimated. Consequently, the report expects housing prices to decline.

According to Juho Keskinen, an economist at Hypo, the report suggests that housing prices will decrease by approximately seven percent on average nationwide and by eight percent in the Greater Helsinki area throughout 2023.

However, on a positive note, Hypo anticipates a moderate upward trend in housing prices towards the end of the year. This prediction is contingent upon changes in demand. Keskinen stated that the situation is expected to improve in the following year, as the construction of new apartments decreases, interest rates stabilize, and there is a projected growth in demand.

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Finland's housing market faces steepest price decline since 1993

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