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August housing prices down year-on-year

The Finnish Financial Supervisory Authority also announced that the housing loan cap would remain in place.

An apartment building stairwell with green painted walls.
Housing prices fell across the country for blocks of flats and row houses in August, year-on-year. Image: Kalle Purhonen / Yle
Yle News

Prices of old dwellings in blocks of flats and row houses across the country fell by 6.2 percent in August compared to the same month a year ago, according to preliminary data from Statistics Finland.

However, compared to July, last month's housing prices rose by 0.9 percent.

Year-on-year, prices fell most in the Helsinki metropolitan area. In Vantaa there was a 10.6 percent drop, a decline in Espoo of 8.9 percent and in Helsinki prices decreased by 7.7 percent.

Prices of dwellings in blocks of flats across the country dropped by 7.0 percent and those of row houses by 4.3 percent, year-on-year.

In August, there were 27 percent fewer sales of old dwellings in blocks of flats and row houses compared to 2022.

That decrease was mostly attributed to higher interest rates and rising costs for homeowners. In addition to the lower prices, properties are also on the market for longer periods of time.

Financial Authority makes no change

With the current uncertainty in the housing market, the Finnish Financial Supervisory Authority has announced that it will keep the housing loan cap, or the maximum loan-to-value ratio for mortgage loans, unchanged at 85 percent for the time being. This does not apply to first-time home buyers.

In practice this means that a minimum of 15 percent of a home's value is required for a down payment in order to secure a mortgage.

In a press release, the authority said that due to high levels of household debt and uncertainty in the housing market, the current loan ceiling limits the growth of loans that are large in relation to their collateral.

In addition, the loan guarantee ensures that new borrowers can tolerate the risk, the authority said.

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