Helsingin Sanomat handled in his editorial (13.6.) risks of housing association loans. Along with them, the benefits of the loans must also be taken into account.
Housing association loans make it possible to buy an owner-occupied home with a smaller share of self-financing. It reduces the risk of being trapped in two apartments, when during the construction period the purchase price payments are small and after the apartment is completed, you have been able to take advantage of the repayment holiday.
For private landlords, the housing association loan has also paved the way for the purchase of a new apartment. The construction accelerated by the demand for apartments has restrained the rise of both apartment prices and rents.
For the builder, a housing association loan means a smaller capital requirement. Small and medium-sized construction companies have entered the market, which has increased competition in the construction industry.
The rise in interest rates and costs has strained the finances of home buyers, whether it was housing association loans or personal loans. The partners pay the housing association loan in their consideration. If the consideration is not paid, the housing company can resort to debt collection or take control of the apartment. Ultimately, the collateral is the apartment.
The occurrence of large losses for housing associations would require that no one would pay at least the share of the housing association loan for the apartment, i.e. 70 percent of the original debt-free price. This would mean price collapses similar to the recession of the 1990s, while in the early months of this year, the prices of new homes fell by only two percent year-on-year.
Although many apartments have been built in recent years, they have become necessary in growth centers. According to VTT, about 35 new apartments are needed per year, but the average annual production throughout the 000st century has remained at 2000 apartments.
Due to the rapid turnaround in the housing market, there is now a temporary oversupply, but the stagnation of construction can create a shortage already in a year or two.
The functionality of housing construction and the housing market must be taken care of. They are important not only for those who need housing, but also for employment and the economy as a whole.
The article has been published In Helsingin Sanomat 19.6.2023 June XNUMX.
Anu Kärkkäinen
Director, Economic Policy Affairs
anu.karkkainen@rt.fi + 358 50 337 6699Building Construction Industry Association
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