A shortage of apartments has pushed competition between estate agents to extreme levels.

Underhand tactics are being employed by Finland’s estate agents to generate competition in the market, the financial newspaper Talous Sanomat reports.

Real estate agents are now promising exorbitant asking prices for apartments on sale simply to acquire properties to broker. The shortage of apartments for sale has pushed competition between agents to a ferocious level. This is now hiking up property prices even more. An over-the-top price promise is however a disservice, warns one agent.

The lack of places for sale is so great at the moment that some of the smaller agents have dug up an old competitive weapon: overly large price promises. In some places there may be several hundred euros of hot air in the prices per square metre.

“Unfortunately the phenomenon appears to be a reality. We don’t accept it. It’s an unhealthy means of competition and is against good brokering practice,” says managing director Jukka Malila of the Central Federation of Real Estate Agents.

Agents speak of a phenomenon that repeats cyclically. According to Malila, the phenomenon has been observed for a long time, it repeats from time to time and may be very case specific. His remedy would be the industry’s complete retraining.

“In buying and selling it’s always about the greatest investment in an ordinary person’s life,” he reminds.

According to the managing director of Kiinteistömaailma Tommi Rytkönen, the markets have been plagued by low supply all year, which has created an “optical illusion” and a “hectic atmosphere.”

“There are stories coming in from the field of how the brokering contract went to another agent when it promised the seller of the apartment a bigger price. One may well ask what kind of morality guides the actions of such agents.”

According to Rytkönen, making oversized price promises may turn out to be a real disservice.

“Buyers notice that a flat has been on the market for a long time and wonder if there’s something wrong with it?”

TALOUS SANOMAT 21 AUGUST. SAKARI NUPPONEN
Lehtikuva - Vesa Moilanen