House prices were up by 2.26% y-o-y in Q3 2020
The average price of dwellings rose by a modest 2.26% during the year to Q3 2020, an improvement from y-o-y declines of 0.21% in Q2 2020, 0.28% in Q1 2020, 2.69% in Q4 2019, and 0.89% in Q3 2019. Quarter-on-quarter, house prices rose by 1.5% in Q3 2020.
Demand continues to fall; construction activity mixed
Transactions of old dwellings fell by 5.6% y-o-y to 44,363 units in the first nine months of 2020, following a 1.4% increase in 2019, according to Statistics Finland.
Dwellings starts in residential buildings rose by 3.2% y-o-y to 25,599 units in the first eight months of 2020 while completions were down by 9.1% to 23,588 units.
Finland has suffered several years of very low growth. At the heart of Finland's problems has been the inability of Nokia to compete. Between 1998 and 2007, Nokia was responsible for 20% of all of Finland’s exports; but by mid-2012 Nokia was almost bankrupt, and its contribution to Finnish GDP was actually negative. Aside from Nokia’s weakened activity, exports were plagued by the economic recession in Russia ― Finland’s major trading partner.
The economy has improved gradually in recent years, with unemployment rate falling to 6.7% in 2019, the lowest level since 2008.
Rents, rental yields: moderate yields in Helsinki at 4.11%
Helsinki apartment costs are around €6,609 per sq. m.
| Finland: typical city centre apartment buying price, monthly rent (120 sq. m) | |||
| Buying price | Rate per month | Yield | |
| Helsinki | € 793,080 | € 2,718 | 4.11% |
Recent news. The Finnish economy came out of recession in Q3 2020, with GDP expanding by 2.6% from the previous quarter, following q-o-q declines of 4.5% in Q2 2020, 1.9% in Q1 2020, and 0.6% in Q4 2019. However on an annual basis, the economy continued to contract by 4% in Q3 2020, according to Statistics Finland. The economy is projected to contract by 4.3% this year, in contrast to a 1.1% growth in 2019, based on the European Commission estimates.
