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Sales of old apartments slowed in March

Danske Bank economist predicts a collapse in sales this spring

kauppakirja asunnon pöydällä
Low interest rates are likely to support the market, one economist said. Image: AOP

Sales of old apartments in March were two percent lower than a year ago, new figures from Statistics Finland showed on Tuesday.

Between January and March, transactions of old terraced houses and flats were down six percent on 12 months previously. During the same period sales of new builds increased by around a fifth.

Prices of new builds showed a clear rise in the capital as well as other parts of the country, Statistics Finland's provisional figures showed.

Prices in the capital were up around four percent on a year previously, with a rise of 5.6 percent recorded in the rest of the country. In Helsinki, the square metre price for a newly built apartment on a rented plot was around 5,560 euros while the freehold price was 7,500 euros.

However the price of old properties in the capital rose by two percent, and elsewhere in the country prices fell.

Low rates propping up housing market

Danske Bank economist Jukka Appelqvist said there is now an expectant feeling in the housing market, with March figures not yet reflecting the impact of the coronavirus crisis on property sales volumes or prices.

"We are now seeing an easing off in the market after the spurt on either side of the New Year," Appelqvist said in a statement. "Most likely April's figures will show a clear slowdown."

He said that the market is likely to collapse in spring, and said prices could fall if the coronavirus crisis lasts for a long time and the furloughs translate into unemployment.

But he said that the record-low interest rates will support the market more than during previous financial crises.

"Most likely the low interest rates will continue for some time, taking the pressure off forced sales which can push prices downwards," he said.

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