Finland regions

Finnish real estate market heading for a price slowdown | New

Housing market price growth has slowed the most in the capital region, according to Nordea.

According to Nordea, interest rates on home loans are expected to continue to rise over the next two years. Image: Petteri Bülow / Yle

OP Financial Group and Nordea Bank predict that house price growth in Finland will slow this year and next, following the period of exceptional growth in 2021.

According to the latest forecasts from OP Bank, house price changes next year will remain between -0.5 and +0.5 percentage points, due to rising interest rates, inflation and slowing economic growth.

While house prices have risen this year, the rate of increase has slowed.

According to Nordea, the capital region has seen the biggest downturn, due to a lack of demand for studio apartments, oversupply due to increased housing construction in the region and an exodus of people from urban centers.

The bank said interest rates on home loans were already rising and predicted the trend would continue over the next two years.

The benchmark rate for most home loans is based on the 12-month euribor rate, which markets predict will rise by around two percentage points next year.