Finnish real estate buying power increased significantly
Lehtikuva / Pekka SakkiNordea, one of Finland's leading banks, reports that the Finnish real estate buying power has increased significanctly in the first quarter of 2009. The reason for this growth is the decline in property prices and the lowered interest rates.
Prices of real estate have declined throughout Finland. The slightly greater drop in property prices in the Helsinki metropolitan area and the divergent price development have resulted in bridging the gap in real estate pricing in different regions. In Helsinki the monthly expenditure in property purchasing has decreased by 300 Euros in the last six months. Nordea's consumer economist Tarja Svartström says that the current real estate buying power is verging on record levels.
The real estate buying power is affected also by the great dip in the interest rates of new mortgages. Comparing to the average interest rates at 4,4 per cent, the current rates are as low as 2,6 per cent. Economist Reijo Heiskanen estimates that due to the decreasing prices of real estate and the positive income development the current buying power of the Finnish people could be considered reasonable even if interest rates were to remain on the average level.
Buying power is weakest in Helsinki, although it has increased significanctly also there. The monthly mortgage expenditure has decreased by 195 Euros since the last quarter. The best buying power was in Kajaani, where the decrease was 69 Euros.
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