Danske Bank forecasts moderate turn in Finnish housing market

Danske Bank predicts a moderate turn in the Finnish housing market toward the end of the year. While housing prices are expected to be 2.7 percent lower on average this year compared to last year, the bank forecasts a 1.3 percent increase in prices next year.

Economist Olavi Kaskisaari notes that although rising interest rates, specifically the Euribor, continue to act as a brake on the market, consumer confidence regarding home buying and borrowing intentions has recovered from spring lows. Factors supporting a potential recovery include strengthening economic growth and cautious signs of improvement in the labor market.

Despite this optimism, the bank warns that rising interest rates increase household costs, which may slow the revitalization of the market. Additionally, residential construction is not expected to see significant changes in the coming year based on building permit data.