The coronavirus pandemic has the potential to aggravate long-standing vulnerabilities in the Nordic housing market. Housing market disturbances can increase credit risk for banks and interfere with their access to funding.

Foreign investment in the Finnish and other Nordic property markets has increased. As a consequence the Finnish market is more vulnerable to external risks.

An extensive materialisation of risks on the Swedish housing market could also have notable effects in the other Nordic countries.

Neighbouring countries’ loan ceiling regulations are tighter than the loan ceiling that comes into force in Finland in summer 2016.

Realisation of potential housing market risks would simultaneously increase loan and investment losses while also pushing up the price of funding.