Last year the number of transactions in the Finnish property market increased by seven percent compared to one year earlier. According to Hypo, a housing market lender, the increased volume of transactions means that prices could be set to rise.
In its latest annual report Hypo doesn’t foresee a rise in interest rates this year. While that is advantageous to homebuyers, and should encourage property purchases, it does indicate that there is no expectation of economic growth or significant inflation.
The bank’s housing index, which combines price data and volume of sales, showed a growth in demand at the end of last year in the capital city region. Taken together, the indications are that prices will not explode, according to Hypo, but moderate growth can be expected—so long as Finland’s sluggish employment situation does not deteriorate further.
Hypo does point to some signs of overheating in the market for smaller flats, however. Ten years ago the square metre price of a one-room studio apartment in Helsinki was less than twenty percent higher than the cost of a square metre in a two-bedroom flat. Now in Helsinki there are studios that go for as much as 40 percent more than the square metre price for larger properties.