ABSTRACT
Towards the end of the 1980s the Finnish property market saw a tremendous upswing, followed by a consequential sharp downswing in the early 1990s. The collapse of the property market caused enormous problems, especially to the banks that had allowed credit to a property market which previously was so stable. Whilst the banks have recovered with support from the State, many small and medium-sized firms have gone bankrupt as the value of their real estate assets, constituting the securities for loans, declined. Currently, in the balance sheets of many firms, banks, insurance companies and pension funds, real estate valuation is very problematic, indeed, there is a vigorous discussion as to how property should be valued.
