Property prices in Finland are rising again. During Q2 2011, prices of old dwellings in blocks of flats and terraced houses went up by 1.42% q-o-q (0.52% in real terms) to €2,289 per square metre (sq. m.).
• In Greater Helsinki, property prices rose 1.7% to €3,388 per sq. m. during Q2 2011
• In the rest of the country, prices increased 0.6% to €1,657 per sq. m. during Q2 2011
The price of new flats and terraced houses has risen specially fast, up 3.1% during the quarter to €3,225 per sq. m..
• In Greater Helsinki, prices went up by 0.7% to €4,475 per sq. m. during the quarter
• In the rest of Finland, prices rose 4.5% to €2,775 per sq. m. during the quarter
During the year to Q2 2011 the average price of old flats rose 3.81%, according to Statistics Finland. However when adjusted for inflation, property prices rose by just 0.45%.
During the year to end-Q2 2011:
• In Greater Helsinki, old apartment prices increased by 3.7% while new apartment prices rose by 7.7%
• In the rest of Finland, old apartment prices rose 2.7% while the prices of new apartments increased by 8.2%.
Residential construction is powering ahead. In May 2011, permits for residential block of flats and terraced houses rose 45% from a year earlier, while detached house permits went up by nearly 9%. Residential construction volumes rose 15.4% during the year to May 2011:
• Residential flat construction – up 34.1%
• Detached house construction - up 5.4%
• Terraced houses – up 12.6%
• In Greater Helsinki, property prices rose 1.7% to €3,388 per sq. m. during Q2 2011
• In the rest of the country, prices increased 0.6% to €1,657 per sq. m. during Q2 2011
The price of new flats and terraced houses has risen specially fast, up 3.1% during the quarter to €3,225 per sq. m..
• In Greater Helsinki, prices went up by 0.7% to €4,475 per sq. m. during the quarter
• In the rest of Finland, prices rose 4.5% to €2,775 per sq. m. during the quarter
During the year to Q2 2011 the average price of old flats rose 3.81%, according to Statistics Finland. However when adjusted for inflation, property prices rose by just 0.45%.
During the year to end-Q2 2011:
• In Greater Helsinki, old apartment prices increased by 3.7% while new apartment prices rose by 7.7%
• In the rest of Finland, old apartment prices rose 2.7% while the prices of new apartments increased by 8.2%.
Residential construction is powering ahead. In May 2011, permits for residential block of flats and terraced houses rose 45% from a year earlier, while detached house permits went up by nearly 9%. Residential construction volumes rose 15.4% during the year to May 2011:• Residential flat construction – up 34.1%
• Detached house construction - up 5.4%
• Terraced houses – up 12.6%
Analysis of Finland Residential Property Market »
RENTAL YIELDS
Last Updated: Aug 01, 2011
Helsinki apartment buying prices are typically around 6,000 Euros per sq. m.
Gross rental yields in Helsinki are on the low end of moderate, with most apartments yielding under 4%. The strongest yields are on very small apartments – a 35 square metre (sq. m.) apartment will yield approximately 5.3%. On this sort of size, rentals have moved up in synch with the rise in property prices over the past year.
In general, rental yields are little changed from the peak of the boom.
We remind readers that these are gross rental yields, i.e., they are calculated on the basis of the offered rent, and are before vacancies, costs, repairs, refurbishments or any other expenses. Actually achieved yields are likely to be lower.
Gross rental yields in Helsinki are on the low end of moderate, with most apartments yielding under 4%. The strongest yields are on very small apartments – a 35 square metre (sq. m.) apartment will yield approximately 5.3%. On this sort of size, rentals have moved up in synch with the rise in property prices over the past year.
In general, rental yields are little changed from the peak of the boom.
We remind readers that these are gross rental yields, i.e., they are calculated on the basis of the offered rent, and are before vacancies, costs, repairs, refurbishments or any other expenses. Actually achieved yields are likely to be lower.
TAXES AND COSTS
Last Updated: Oct 22, 2011
Rental Income: Rental income is taxed at a flat rate of 28% and income-generating expenses are deductible from the gross rental income.
Capital Gains: Capital gains are considered as income from capital and are taxed at 28%.
Inheritance: Inheritance tax is imposed at progressive rates of 7%, 10% and 13%.
Residents: Residents are taxed on their worldwide income. Earned income is taxed at progressive rates, from 6.5% to 30% for 2011.
Capital Gains: Capital gains are considered as income from capital and are taxed at 28%.
Inheritance: Inheritance tax is imposed at progressive rates of 7%, 10% and 13%.
Residents: Residents are taxed on their worldwide income. Earned income is taxed at progressive rates, from 6.5% to 30% for 2011.
BUYING GUIDE
Last Updated: Mar 08, 2007
Roundtrip transaction costs are around 8.66% to 9.88% of the property’s price. Real property transfer tax of 4%, usually paid by the buyer, is sometimes included in the selling price especially if the transaction involves an agent. It takes about 14 days to complete the three procedures needed to register a property.
LANDLORD AND TENANT
Last Updated: May 30, 2006
Finland law and practice is neutral between landlord and tenants.Rent: Tenancies are generally unregulated. Landlord and tenant may freely negotiate rents, but the courts may reduce the existing rent if it significantly exceeds the current average market rate charged on comparable apartments in the area.
Tenant Security: The landlord must give a termination notice of at least six months if the tenancy has continuously existed for more than a year, and a three-month notice is mandatory for leases existing for less than a year.
ECONOMIC GROWTH
Last Updated: Aug 30, 2011
Healthy economic growth in 2011
Finland’s small population of 5.3 million, and its huge land area (338,145 sq. km), make it one of the world’s least densely-populated countries. Its GDP per capita stood at US$44,488 in 2010, according to the IMF. It is the only Nordic country to have adopted the euro as its official currency.Finland was amongst the countries most severely affected by the global downturn, with the economy contracting by 8.2% in 2009. However in 2010, the economy bounced back strongly with a real GDP growth rate of 3.1%, driven by a strong financial sector, a stable labor market, and a strong consumer confidence.
The economy is projected to grow by 3.9% in 2011, according to the Ministry of Finance.
In the wake of the global financial crisis in 2009, Finland generated a huge fiscal deficit. The decline in the balance of general government finances was primarily due to a fall in tax revenue, growth in cyclical expenditure and central government stimulus measures.
However in 2011, the government deficit will likely settle back to 0.8% of GDP, and government debt to be equivalent to about 49.7% of GDP - both healthy numbers.The country’s inflation rate was 1.2% in 2010. In early-2011, inflation went over 3% due to an increase in commodity prices. Consumer prices are expected to rise by 3.3% in 2011.
Unemployment rose to an average of 8.3% from 2009 to 2010, up from 6.6% during the preceding two years, according to the IMF. In June 2011, unemployment reached 8.4%, according to the Statistics Finland’s Labor Force Survey.
RSS
Global Property Guide on Twitter
Global Property Guide on Facebook
Global Property Guide on Linked In