Wide regional disparities in Finnish house prices and household indebtedness

Abstract

Finland's house prices have diverged regionally over the past decade, particularly between the Helsinki metropolitan area and the rest of the country. Regional disparities on the housing market are also reflected in the amount of housing debt held by households. Housing loans are large and have grown in absolute terms as well as relative to income, especially in growth centres, where housing is more expensive and subject to greater pressures from demand. Simultaneous growth in house prices and housing debt, if excessive, can pose a threat to the stability of the financial system.