THE FINNISH real estate market has begun to recover from the shock caused by the Russian invasion of Ukraine, according to the Central Federation of Finnish Real Estate Agencies (SKVL).
SKVL on Tuesday estimated in its latest market forecast that the market will take a turn for the better as the uncertainty that surrounded the market in the first days and weeks of last month due to the security situation begins to dissipate.
Jussi Mannerberg, the managing director of SKVL, pointed out that what is already expected to be a solid spring could be even better depending on international developments.
“If we got a decision from Finland on Nato or a peace in Ukraine, it’d be another plus,” he said in a press release. “The spring sun has brought the market newfound, firm confidence in a better future, while the economic disruption is set to be smaller than expected and only have a minor impact on real estate trade.”
SKVL compiles its market forecast based on the results of a survey distributed to real estate brokers across Finland.
The forecast indicates that relatively new detached homes will be in particularly high demand this spring and summer, leading to price increases in all parts of the country. In Kanta-Häme, Pirkanmaa and Southwest Finland, for example, more than half of the brokers predicted that the prices would increase.
One of the underlying factors is inflation. Mannerberg explained that an inflationary environment encourages people to invest in fixed assets, such as real estate.
Demand is similarly expected to rise for holiday homes in good condition located near a body of water, according to SKVL. “Having your own around-the-year cabin away from the city has become increasingly popular since the outbreak of the war,” told Mannerberg.
Inflation, though, has also slowed down cabin sales by raising construction costs.
SKVL also forecasts that the rents of small flats in particular will continue to decline at least moderately. Demand for larger rental flats will contrastively continue to increase due to limited supply.
Sanctions on Russia have resulted in a significant drop in the share of Russian buyers and sellers in the Finnish real estate market.
Russian nationals have been a feature of the market particularly in the capital region and eastern parts of the country, accounting for 5–10 per cent of the transactions according to some of the central federation’s member companies. Their share of the entire domestic market, however, has been “negligibly small,” said SKVL.
Aleksi Teivainen – HT
