"The paper suggests that aggressive use of housing-company loans made expensive new apartments appear artificially affordable, encouraging households to take on leverage that was mispriced. To illustrate the point, HS explains that the selling price might have been 120,000 euros, while the debt-free price was 400,000. This means the apartment carried a 280,000-euro housing-company loan. The paper blames a decade of ultra-low interest rates, expanded student housing benefits, and a surge in amateur buy-to-let investing, further overheating demand."
"Economists now argue that recovery will be slow unless policy addresses structural distortions, including the use of housing-company loans in new construction. Without reforms, according to HS, the same boom-bust cycle could re-emerge later in the decade as credit conditions ease and collective memory fades. All Points North's latest episode asks whether Finland's housing market is finally stirring. Listen to the episode via this embedded player, on Yle Areena, via Apple, Spotify or wherever you get your podcasts."
Aggressive use of housing-company loans made expensive new apartments appear artificially affordable, prompting households to take on mispriced leverage. Selling prices sometimes stood at 120,000 euros while debt-free prices were around 400,000, implying large embedded loans. A decade of ultra-low interest rates, expanded student housing benefits, and a surge in amateur buy-to-let investing intensified demand. Developers responded with oversupply of small, low-quality units optimized for investor returns. Economists warn that recovery will be slow unless policy addresses structural distortions, including housing-company loans in new construction, or the boom-bust cycle may re-emerge later in the decade. Many government agencies now offer extensive offsite work, often requiring presence only one day a week or month, and recent plans to tighten remote-working policies have upset civil servants.
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