Tuesday, 2 September 2008

Nordea: housing market more stable in the Nordic countries


"Overall, we estimate that economic expansion in Finland will slow to well below the average level as early as the second half of 2008, and a recovery cannot be expected until 2010," Nordea said in a statement.

"Still, the Finnish outlook is fairly reasonable compared to many other countries. Overall, the macroeconomic balance is in good shape and the housing market has been more stable than elsewhere in the Nordic countries
."

I agree, once with Nordea, correction have already begun in Sweden, Denmark and Norway. Finland, like in the 1990's, has always lagged. I don't know why and the reason, maybe due to the media, or common belief that "this time it's different".

But Now, like an apple being thrown in the air, it's ultimately being stopped by the "affordability" gravitational forces. Thinking that it can stay magically in suspension, is like telling that finns don't drink...I don't believe that, do you?

7 comments:

Andrew said...

"2.9.2008 at 17:51

Finnish fibreglass motorboat maker Bella Boats said Tuesday it would close five factories in Kuopio and one in Kokkola and lay off 250 workers until January.

It added that the factories in Pietarsaari and Larsmo would continue to operate normally.

Bella said it had taken the decision to temporarily close the factories because of declining sales.

Last week, the company opened two new factories in Kuopio, with one replacing a facility destroyed in a fire in 2006.

Bella is the biggest motorboat maker in the Nordic region, with exports to 24 countries."

This is the stuff of collapsing economies. it would be interesting to see what flow on effects this has for all of the suppliers of this relatively large manufacturer when you consider all of the retail/resale/import/export organisation and small part manufacturing that gets involved with a company of that size.

Also interesting to note how vulnerable other companies are to this kind of presumably ordinary consumer led downturn in recreational? boat building that is always directly related to overall consumer well being.

HousingFinland said...

- Finnish furniture maker Isku said Wednesday it would cut 53 jobs at its industry furniture and services unit in Lahti

- Finnish forest industry cooperative Metsäliitto said in a statement Wednesday it would launch a round of statutory cooperation procedure talks with an eye on closing its loss-making Soinlahti sawmill.


etc etc...

But still the unemployement figure are a showing a drop... in fact the active population is dropping and very fast because lots of people are going to retirement so this will accelerate...

That could put lots of pressure on the job market...so either wage price will spirale to the infinite or more company will just move abroad and delocalise...

I think the last will happen...less and less company will open in Finland and more and more comapny are going to open office where the market is: Asia.

So at the end the 1980-2006, bull market that saw an ever increasing GDP, stock market and housing has just come the an end.

Not sure what will be the consequence...i just hope that it will be slow, slow enough that people won't notice and adapt accordingly... I suppose not as violent as in the U.S. or U.K., economies that adapt at light speed...

Andrew said...

There has been a noticable pulse in properties for sale since end of August and continuing reductions in marked prices.

I dont know enuf about the market here to know if houses do tend to come onto the market before the winter for an autumn sale but thats a reasonable idea.

Even so if people want to sell before prices come down more by the spring selling season then they will have to compete with other houses or risk being unsold all winter. An obvious statement but at this stage of the market i imagine many will have an urgency to sell now rather than be left as daily financial news gets worse and worse. One house marked at 690 beginning of August got a reality check and went to 490 3 weeks later. Reality is on its way now and its coming quicker than people expected or so i believe.

The ECB announced yesterday it will continue the extraordinary mortgage funding until February before applying greater discounts/hair cuts to valuations before lending. It has been forced by the market to do that. Debt is now the kiss of death for many. Debt the great wealth creator of the last century is now public enemy number one.

Meanwhile as a foreigner living in Finland i was enormously proud to be associated with the Finnish president when she released a statement on the Russian situation that called for steady hands and cool nerves while she reminded us all of certain World realities that gave me hope that Finland is not a bad place to be right now.

Andrew said...

http://www.guardian.co.uk/business/feedarticle/7774796

a pretty good overview of what the ECB having been doing and why they are now saying they are going to make changes.

Effectively this is a bank rate rise. At the moment i dont see any chances at all of rates being reduced by ordinary banks lending to the public. The Nordic region would have to disconnect their trading from the rest of the world for that to happen - an impossibility.

I am guessing that Norwegian and who knows even Russian wealth will begin to play a role in this region soon to balance these world forces

Andrew said...

Had to laugth at this........

"Meanwhile as a foreigner living in Finland i was enormously proud to be associated with the Finnish president when she released a statement on the Russian situation that called for steady hands and cool nerves while she reminded us all of certain World realities that gave me hope that Finland is not a bad place to be right now."

"I am guessing that Norwegian and who knows even Russian wealth will begin to play a role in this region soon to balance these world forces"

"Russia apologises for Finnish airspace violation"

"Russian about to buy some major big forest company in Finland"

:-)

Things could be worse.

HousingFinland said...

Andrew, this are media propaganda...i can tell you that's what is happening with Russia is pretty serious: they are fighting inflation, capital outflow have soared, stock and currency are tumbling...a perfect storm.

Andrew said...

Housing Finland

The first two comments were my own from earlier in the day.

I assume the Russians did apologise?

I assume a russian is going to buy a Finnish forestry company?