The taking out of new housing loans turned to a downward trend in August. The Bank of Finland announced on Tuesday that new home loans were taken out worth EUR 1,597 million in total, which marks a 16% decline compared to the same time last year.
The last time less than this was borrowed for house buying purposes from the banks operating in Finland was in August 2004.
Also on the yearly level, the taking up of housing loans seems to be fading. During the first eight months of 2008, banks in Finland granted home loans worth around EUR 14.6 billion in total. This is only EUR 87 million more than during the corresponding period in 2007.
According to Nordea’s Head of Banking Finland Pekka Nuuttila, cautiousness has increased in the property market.
“Lately housing loans have been in demand just like before. But it may be that this is a question of the tails of old loans, for changing homes is a lengthy process. This is because now everybody wants to stay clear of the two-home trap”, Nuuttila says.
Taking a loan is now clearly more expensive than just over a month ago. The rise of market interests and banks’ margins has heaved the interest of new housing loans past the six per cent mark.
In August the average interest for new housing loans was still 5.47%, which was 0.02 per cent lower than in July.
