THE POLARISATION of the housing market is set to intensify in Finland, according to Pellervo Economic Research (PTT).
PTT on Wednesday revealed that it expects house prices to rise only in the largest population centres, but decline not only in rural areas and the remote parts of population-growth regions but also in regional population centres.
“The housing markets will become more pronouncedly polarised,” summarised Peetu Keskinen, a housing market expert at PTT.
“The price development has been sluggish also in the remote parts of growing regions. Even Helsinki does not have an impact that extends across Uusimaa. The growth of the housing markets will roughly speaking focus on a very small geographical area in the 2020s: in the urban areas of Helsinki, Tampere and Turku.”
PTT identified Pirkanmaa as a fitting example of a region that has seen both its population grow and housing prices tumble in its remote parts – by seven per cent for condominiums and 10 per cent for detached homes from the peak of the past decade.
Helsingin Sanomat on Wednesday highlighted that the increase in housing prices has kept pace with income development in the majority of large cities in Finland. In Helsinki and Tampere, however, the increase has outpaced income development, meaning that the price per square metre has crept up relative to disposable income.
While the annual mean income was enough for over 20 square metres of a condominium in Jyväskylä or Oulu, it was only enough for 10 square metres in Helsinki, according to the daily.
PTT pointed out that the development has a significant impact on the regional economy, as it forces lenders to weigh up risks more carefully in areas where prices are falling and consumers to compare the merits of buying and renting.
Its forecast indicates that the prices of dwellings in old blocks of flats will rise by 1.0 per cent in 2020.
The increase is expected to be the fastest in Helsinki (3.1%) and Tampere (3.0%). Kuopio and Lahti, by contrast, are set to witness the steepest declines in the prices of dwellings in old blocks of flats – of 2.0 and 1.4 per cent, respectively.
Aleksi Teivainen – HT
Source: Uusi Suomi