Purchasing a home and selecting a residential area are based on your individual needs and desires. While immediate needs may be emphasized when choosing a location, it is also important to consider the long-term phenomena brought about by megatrends. Garantia picked out four essential points from Hypo’s recent Housing Credit Rating that a home buyer should be aware of.

A mortgage is taken out for decades. Therefore, it is good to look further than just the current price and interest rate level. At the time of purchase, the buyer may focus on currently relevant matters, while longer-term phenomena may be forgotten.

Garantia’s partner bank, Hypo, has compiled factors influencing the development of residential areas in its recent Housing Credit Rating. Hypo classifies long-term risks and crisis resilience at the municipal, and even district, level through various themes, such as migration, municipal economy, and environment. The ten-point scale used in the classification ranges from the best AAA-class to the weakest D-class.

Garantia picked four interesting points from the review and offers tips on how to take them into account already during the home purchase phase.

Buy within the growth triangle – Population growth supports price development

Hypo’s rating confirms that growth centers offer the best security for the value of an apartment.

  • A-class municipalities: Only 13 municipalities achieved the best A-class, including Helsinki (A+), Tampere (A), and Turku (A-). These areas rely on strong population growth, which supports housing demand and value development beyond economic fluctuations.

Garantia’s tip for the buyer: A sustainable municipal economy and a continuously growing population lay the foundation for the long-term appreciation of a home’s value.

Consider apartment size and population trends

Changes in demographic structure directly affect the size of apartments that will be in demand in the future:

  • The challenges of small apartments: Although small apartments still have their place near good transport links, Hypo’s view is that demand will increasingly focus on slightly larger apartments going forward. One reason cited for this is the increase in immigration, which leads to generally larger family sizes. Furthermore, housing allowance reforms encourage shared living arrangements.

Garantia’s tip for the buyer: If you are looking for an investment property, consider apartments larger than studios near good transport links, as their demand appears to be growing.

Check for a new risk: Are you in a stormwater area?

The Housing Credit Rating highlights a new, less-recognized risk: Stormwater flooding (Hulevesitulvat). Extreme weather events are becoming more common, and this risk is concrete for the home buyer.

  • 1 in 20 residential square meters at risk: Approximately 5% of the floor area of residential properties in Finland is located in an area with a significant stormwater flood risk. This is five times greater than the share in traditional river and sea flood areas.
  • Risk areas in cities: The stormwater risk is on average higher in densely built cities (e.g., over 9% in Helsinki and over 7% in Tampere). The risk of moisture damage, reduced resale value, and potential repair costs pose a financial risk to the home buyer.

Garantia’s tip for the buyer: Find out the stormwater risk of your residential area before making a purchasing decision. Check if the housing company has prepared for floods caused by heavy rain (e.g., french drains, backflow prevention height).

The bottom of the market cycle is here – Now is the time for action

Regarding economic cycles, Hypo sees the bottom of the market cycle as being at hand.

  • Price increase ahead: Decreased interest rates and growing transaction volumes lay the foundation for an upswing in housing prices. In the Helsinki metropolitan area, an increase of up to 3.0% is forecasted for 2026.

Garantia’s tip for the buyer: The economic cycle appears to be turning, so it is not wise to postpone the purchase of a home. According to Hypo’s assessment, housing prices will rise next year across the country, and in the Helsinki region the most in 15 years, excluding the hot pandemic years.

Explore the entire Hypo rating and assess the risks of your purchase target (only in Finnish)

Ville Korte

Head of Sales and Marketing
The author has over 20 years of experience in mortgage lending at Garantia and in the banking sector.

Suomen Hypoteekkiyhdistys (The Mortgage Society of Finland) is one of Garantia’s partner banks, and Garantia’s mortgage guarantees can be granted in all municipalities in mainland Finland, according to the banks’ operating areas.