House prices will this year decline by 0.7 per cent nationwide and by 0.5 per cent in Helsinki, forecasts Pellervo Economic Research Institute (PTT).
Ari Pauna, the chief executive at the Mortgage Society of Finland (Hypo), estimated in Monday's edition of Helsingin Sanomat that nationwide the prices of old dwellings may drop by as much as one per cent.
PTT estimates that the decline in Helsinki will be short-lived unless Finland faces “a massive macro-economic shock”.
The research institute unveiled its market forecast for 2015—2017 on Tuesday, estimating that incomes will continue to fail to keep pace with rising rents. As a result, rents will use up an increasing proportion of the incomes of tenants in all major Finnish cities.
PTT also forecasts that the so-called Nurmijärvi phenomenon will return to some extent. The phenomenon refers to the migration of people to sparsely populated neighbourhoods in the commuter belts surrounding major urban centres.
The phenomenon has abated in recent years and been replaced by a flow of migrants from the commuter belts to urban centres. PTT estimates, however, that the reversal is only a temporary migration trend. “Once the economic conditions ultimately take a turn for the better, the demand pressure arising from urbanisation will be distributed more evenly between urban centres and the surrounding areas,” a bulletin issued by PTT says.
PTT is affiliated with companies and organisations in the agriculture and forestry sector.
Minna Nalbantoglu – HS
Aleksi Teivainen – HT
© HELSINGIN SANOMAT