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Finnish Landlords predict that housing prices will be at pre-crisis levels in two years only in growth centers. However, rents will rise across the country again this year. NEWSPAPER / IRENE STACHON
The interest rate crisis is likely to cause housing prices to fall by half a per cent in the Helsinki metropolitan area, Turku and Tampere and three per cent elsewhere in Finnish cities this year, according to the Finnish Landlords’ and Pellervo Economic Research Centre’s housing investment forecast.
By 2023, prices will rise above pre-crisis levels, probably only in growth centers.
Rents, on the other hand, are forecast to grow at an annual rate of about 1.3 per cent in Finland in the coming years. As rents rise, the differences between regions are small. Last year, rents rose by about 1.2 percent in forecast cities.
According to the forecast, the interest rate crisis will have little effect on the rise in rents, and this has been curbed by demand-side housing construction.
– Due to the strong differentiation of price development, the landlord in small and medium-sized cities has to prepare for the decrease in the value of the apartment and longer marketing periods in renting. In large cities, the projected rental income is more moderate, but in terms of value development and finding a tenant, renting is less stressful, says Sakari Rokkanen, an economist at Finnish Landlords, in a press release.
The rental income of studio apartments is relatively the highest
So rents are rising, but housing prices have come to a halt. According to Rokkanen, the result is that the projected average rental income will increase in all cities compared to the previous year’s forecast. However, the total return on housing investment, which takes into account the increase in value in addition to rental income, lags behind large ones in small and medium-sized cities.
The average rental income is projected to be 5.6 per cent for studios, 3.6 per cent for one-bedroom apartments and 2.9 per cent for triangular and larger dwellings in the cities surveyed. The rental income tells you how much of the price of the apartment is left in the hands of the owner after, among other things, the payment of care fees.
The highest pre-tax rental income of studios is in Kajaani and Kouvola, where 7.7 per cent of them net. The relatively lowest rental income for studio apartments is in Helsinki, where it is 3.2 per cent.