Housing market|According to the OP group’s assessment, without the negative impact of construction, Finland’s economy would have grown all the time and developed at the same pace as the euro area.
The summary is made by artificial intelligence and checked by a human.
OP estimates that the housing market has turned for the better after the sticky start of the year.
OP raises next year’s price increase forecast to 2.8 percent from the previous 2.0 percent.
For the current year, OP predicts that share housing prices will decrease by 2.0 percent.
Euribor interest rates have fallen significantly, which supports the recovery of the housing market.
Financial company OP evaluates in the fresh in its housing market review that the housing market has turned for the better after a sticky start to the year.
OP raises its forecast for next year’s price increase to 2.8 percent, while previously it expected a 2.0 percent increase.
For the current year, OP’s economists, on the other hand, reduced their forecast for the development of house prices after the expected slow sum at the beginning of the year.
The prices of condominiums are expected to decrease by 2.0 percent instead of the 1.5 percent decrease predicted by OP in May.
“The sales volume of apartments has already risen from the bottom reading, but sales are still clearly lower than normal. Regarding the rest of the year, there has been no major change in expectations and we still expect that the housing market will start to pick up during the fall and winter”, OP group’s senior economist Joona Widgrén says in the announcement.
Housing market Euribor interest rates, which are important for
On Monday The 12-month euribor already fell below three percent. The last time the interest rate was below three percent was in mid-December 2022.
According to Widgrén, there are signs for a more sustainable recovery of the housing market with the decrease in interest rates, good income development and the improvement of the economic situation.
“The weakening of the labor market dampens the mood a bit, but overall, the outlook for the housing market to pick up is good.”
Residential construction investments have decreased from the level at the beginning of 2022 by 35.7 percent. They have already fallen to the same level as 15 years ago.
According to OP’s assessment, without the negative impact of construction, Finland’s economy would have grown all the time and developed at the same pace as the euro area.
“The collapse of construction has indeed played a significant role in the weakness of the economy,” says Widgrén.
However, according to the OP, some initial signs of pick-up are visible in the lower part of residential construction.
Seasonally adjusted, construction permits have risen from the bottom reading at the beginning of the year, and the number of open jobs in the construction sector has also risen slightly from its lowest levels.
However, exceptionally few new apartments will be built this year and next year.
Building permits we are now applying for larger apartment buildings than before.
In particular, the average size of apartment buildings under construction will increase in the next few years. The share of small apartments among new apartments being built will probably remain smaller than before, OP estimates.
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