Wednesday, 4 June 2008

Finnish Housing Market Weakening

"Finland's Mortgage Society said in a statement Wednesday that the housing market outlook was clearly weakening despite brisk sales of old houses and flats this spring."

"The private credit institution added consumers' confidence in their own finances and in the economy had been shaken by the eye-watering price of oil, the rising price of food, inflation and rising interest rates."

Good, some are not only looking at their rear mirror but have a forward looking attitude.

Alas, this warning comes a little bit late for people who have taken massive mortgage (pushed by the smiling banker face).

Now, if as planned the market slows drastically during the next few years, then for those who have purchased at the top, have enough amunition (i.e saving) to weather any possible economical crisis. For those who are about to buy, it's better to have a 'wait and see' approach. For those who need to sell, the faster the better even pushing some discount...

2 comments:

Anonymous said...

Hi, I am a research analyst at a US based investment fund, and am interested that you are seeing similar mispricings in real estate markets as we had in the US. Would you mind speaking with me briefly about the situation in Finland / Scandinavia? I'm particularly interested in the 100% financing and low-doc loans that led to so much mortgage fraud here in the US--did that occur on a wide scale in your markets?

thanks,
Duncan
dwsresearch at gmail dot com

Mau said...

Well,

Lets say that in Finland you can quite easely get 100% mortgage without giving any cents.

They use to check your income but with tough competition in the past few years, i have seen lots of people getting massive loan with regard to their income.

Then you have Nordea and co, that still claim that people debt servicing is under 70% i.e 30% of their income goes to servicing their debt. That's a pure nonsense...Price in Finland are almost double in the past 10 years outpacing salarie rise by far.