Risks associated with housing company loans are increasing – Regulatory reforms will restrict use of such loans in the future

Abstract

Rising interest rates and rising costs are straining the finances of housing companies in Finland, causing an increase in the direct and indirect financial stability risks associated with housing company loans. Although housing company loan renegotiations are showing a slight upward trend, there is otherwise little evidence so far of debt servicing problems. The way housing company loans are used in the residential property transactions of households and investors has long been a cause of concern for the authorities. Regulatory amendments on the repayment and maximum amount and duration of housing company loans are on their way. These will be important for keeping household indebtedness and credit risks in check.