The prices of old single-family houses fell by 7.6 percent in Finland last year in the second half of the year, Statistics Finland said on Wednesday. At the same time, the number of sales decreased by about a fifth.
In the capital region, the prices of old detached houses fell by 9.1 percent, while in the rest of the country they were down by 7.3 percent.
Prices of old detached houses fell the most in Eastern Finland, where the decline was 11.4 percent. The mildest price drop was in northern Finland, where prices dipped by 2.4 percent.
Meanwhile, sales of older detached houses decreased the most in the capital region and in other large urban areas. Sales volumes decreased most moderately in smaller municipalities with less than 20,000 inhabitants.
Short-lived uptick in sales
In the last quarter of the year, there was a clear uptick in the number of housing sales. Between October and December, sales of old detached houses were about 17 percent higher than in late 2022.
"The government's changes in transfer taxation enlivened the sale of single-family houses, especially in December, when single-family houses changed hands at the fastest rate since 2020," said Juho Keskinen, chief economist at the Mortgage Society of Finland (Hypo), in a press release.
First-time home buyers were apparently rushing to take advantage of a transfer tax exemption before it ended at the turn of the year. The property transfer tax rate was also lowered from four to three percent in October.
"The government's proposed change last autumn also hit the hardest at a time when housing sales are typically a little slower, which contributed to the increase in the volume of sales compared to a year earlier," explained Keskinen.
"Business picked up very noticeably, but that doesn't mean that the sales market has properly, permanently restarted under its own power. Spending slowed again in January, so the new situation in the housing market won’t become clearer until the spring and summer, when declining interest rates start to materialise for consumers," he pointed out.
In the October-to-December period, the average price of an older detached house rose by 0.5 percent from the previous quarter – but was still down by 4.5 percent compared to a year earlier. However, prices paid for new single-dwelling houses popped up by two percent in 2023.
Prices of plots for single houses fell by nearly 12 percent in smaller municipalities with under 20,000 inhabitants. In larger municipalities, property prices only edged down by a few percent.
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