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OP: Finland's housing price decline to continue

The housing market has taken a hit by rising mortgage prices and historically low consumer confidence.

Rakennusliike Laptin rakentama Kuopion Portti rakenteilla.
OP Financial Group expects the construction of new houses to also decline as demand remains low. Image: Sami Takkinen / Yle
Yle News

Property prices will continue to fall this year, OP Financial Group's most recent report confirmed.

The group's economists have confirmed a previous forecast of an average decline between four and six percent in 2023.

The decline is largely due to rising interest rates on housing loans.

Mortgages have grown increasingly expensive as general interest rates have risen, however OP's predictions add that the sharpest peak is most likely behind. The number of drawn mortgages remained exceptionally low at the end of 2022.

In addition to high interest rates, the housing market has also taken a hit by record low consumer confidence.

OP also expects housing construction to weaken this year as demand remains low.

The number of unsold new homes has risen sharply since the middle of last year. This year, construction is expected to fall by some five percent, according to the group.

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