THE MORTGAGE SOCIETY OF FINLAND (Hypo) says it has identified a new phenomenon in the Finnish real estate market: the number of families with children in downtown neighbourhoods has grown considerably.
Hypo highlights in its latest market review that the phenomenon is evident also in neighbourhoods that were developed fully decades ago, such as Etu-Töölö and Punavuori in Helsinki.
The number of families with children in the two neighbourhoods increased by almost 40 per cent between 2008 and 2018. In the suburbs of the capital, by contrast, the number grew by only six per cent over the 10-year period, according to Hypo.
The demand for housing is high also in downtown neighbourhoods of Tampere and Turku, but it has begun to slow down outside the so-called golden triangle formed by Helsinki, Tampere and Turku – even in Oulu. The phenomenon is problematic especially because only a limited number of new housing units are built in downtown areas.
Meanwhile, the real estate markets of medium-size cities have polarised as demand has been high only for centrally located housing units.
“Areas that have relied on spacious detached-home living, two-car ownership and large families are faced with challenges. Fewer children are born than ever before in the history of independent Finland, and more and more families with children are looking for an urban lifestyle close to the services of cities,” summarised Juhana Brotherus, the chief economist at Hypo.
Hypo consequently believes promises of keeping the entire country inhabited should be taken with a grain of salt, highlighting that doing so is a challenge even in certain parts of Uusimaa.
The trend seems all but irreversible, it concludes. In Äänekoski, Western Finland, the real estate market has continued on its trajectory in spite of the 1.2 million euros invested in a new bioproduct mill by Metsä Group in mid-2017.
Hypo also delivered a number of forecasts for the remainder of the year: Prices will continue to creep up in Helsinki, Tampere and Turku. The sales of old residential units will slow down as more new units will be built than ever before in 27 years. The sliding birth rate will have a negative impact on the real estate market and ultimately bring down nationwide prices. The decreasing likelihood of an interest rate hike is reason for optimism.
Aleksi Teivainen – HT
Source: Uusi Suomi