News from Finland in English

Apartment prices on the rise in Finland while construction boom continues

The real estate market is brisky and this is reflected in pricing. The pent up demand caused by years of sluggish demand in the real estate market is reflected with a significant rise of number of new mortgages taken in 2016 in Finland.

The rise of prices is supported by low interest ratest, right confidence of households and the continuing urbanization. In addition rising rent prices make purchasing an apartment a continuously appealing option for city dwellers.

The data comes from a Hypo market report on the Finnish real estate. Hypo is the only credit institution that specialises in housing. The institute believes that while prices are rising they are still in balance and there are no signs of a bubble.

The August report divides the Finnish real estate market into three categories:

  • The Helsinki metropolitan area is at regular pace and prices are rising rapidly
  • Other growth centres around the country are picking up pace, but prices remain stable
  • Elsewhere in Finland prices continue to drop, while the number of purchases is on the rise

Summer of 2016 has been the most active summer in real estate markets since 2012. Plenty of new mortgages are taken and the households remain confident, regardless of rising risks elsewhere in the form of terrorism in Europe and the looming exit of Great Britain from the European Union.

New construction is also at record pace and it's especially visible in Helsinki and around the metropolitan area. According to Hypo "Finland is now being rebuilt for the requirements of tomorrow" as most of the construction is in the form of compact city homes (see Finland is the land of single households).

Since the beginning of 2016 over 7000 new apartments have entered construction, 3000 of which are in Helsinki or surrounding cities such as Vantaa. This is the highest rate of construction in the 20 years Hypo has been collecting statistics.

Written by Janita on Thursday August 11, 2016
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