Simply short : Finland’s housing market has very swiftly come to a standstill

Abstract

The standstill in the Finnish housing market is the most severe since the country’s recession of the early 1990s. The risks posed to the financial system will ease, however, if interest rates start to fall and Finland’s economy picks up. On the other hand, if interest rate cuts are postponed and the housing market remains frozen, the risks will increase. A further strengthening is needed in the resilience of both banks and borrowers to economic shocks in view of the subdued growth outlook for Finland’s economy, the vulnerability of the housing market to disruption, and the absence of any easing in geopolitical risks.