The housing market in Finland is facing a downturn as construction of new dwellings has plunged to levels not seen since World War II, Bloomberg reported on Tuesday.
Building of new homes more than halved this year, totaling about 16,000 compared to over 37,000 constructed in 2022, the outlet reported citing data from the Confederation of Finnish Construction Industries.
It is expected that the Finnish construction industry will face a 10% overall drop this year.
“Due to the collapse of housing production, the number of completed apartments threatens to fall to the level of the 1940s in the next couple of years,” the construction group said in a statement. “The rise in interest rates and costs has frozen both consumer and investor demand for new apartments as well as government-subsidized housing construction.”
According to the confederation’s chief economist, Jouni Vihmo, construction activity in Finland will not improve until the interest rate outlook stabilizes. He added that a recovery in the housing market would require a decline in the stock of new homes and a rebound for older dwellings.
The economist also warned that Finland’s construction sector, which employs some 160,000 people, may soon shed up to 30,000 jobs.
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