“I’m very worried,” Finnish Finance Minister Jyrki Katainen said in an interview. “There could be a housing bubble in the making in Finland. There is a risk that mortgage borrowing costs are too low.”Source: Bloomberg
House prices in the three countries (Norway, Sweden, Finland) rose last year even as their economies contracted and unemployment shot up, creating imbalances that economists say now need to be corrected.
About 95 percent of mortgages in Finland and Norway track money-market levels, while about 60 percent of Swedish loans are based on adjustable rates. That compares with the 90 percent of German homeowners whose interest payments are fixed, meaning last year’s record low borrowing costs fed into the Nordic region faster than elsewhere in Europe.
In Finland, the ECB’s 1 percent benchmark rate may be misaligned to the Nordic economy’s needs.
“For preventing bubbles, it would of course be good if Finland had its own monetary policy,” said Mikko Forss, an economist at Roubini Global Economics in London. “Still, it’s not enough alone, as has been argued also by central banks in Sweden and Norway. Regulation is probably the best tool.”
The worrying part is the consumer confidence that break all time records while the global economy is fighting for its survival. Who says that media didn't have any power and didn't distort information?
Nethertheless, as you have notices on the right top side, I will start counting the decline of housing price from 1st quarter 2011, since the dynamic will most probably hold until year end.
I don't know why, but I feel if I was back in 1990, I would have been living the same situation- let's wait and see -