House prices were down 4.96% during the year to Q3 2022
The average price of dwellings fell by 4.96% in Q3 2022 from a year earlier, following year-on-year declines of 2.58% in Q2 2022 and 0.43% in Q1 2022 and increases of 1.36% in Q4 2021 and 2.75% in Q3 2021. Quarter-on-quarter, house prices declined 3.03% in Q3 2022.
Demand is now falling sharply; construction activity mixed
In 2021, total transactions of old dwellings rose strongly by 16.1% y-o-y to 82,865 units, according to Statistics Finland. But in the first three quarters of 2022, transactions dropped by a huge 22.6% to 48,855 units from a year earlier.
Dwelling permits in residential buildings fell by 18.1% y-o-y to 31,495 units in the first ten months of 2022, and dwelling starts dropped 12.5% to 34,135 units. In contrast, dwelling completions rose by 10.5% y-o-y to 32,541 units in Jan-Oct 2022.
Rents, rental yields: low to moderate yields in Helsinki at 2.18% to 4.93%
|Finland: city centre apartment, buying price, monthly rent (2-BR apartments)|
|Buying price||Rate per month||Yield|
|Helsinki||€ 695,000||€ 2,095||3.62%|
Recent news. The Finnish economy expanded by just 1% in Q3 2022 from a year earlier, a slowdown from the previous quarter’s 2.6% year-on-year growth and the lowest expansion since Q2 2021, according to Statistic Finland. On a quarterly basis, the economy contracted by 0.3% during the latest quarter, its first contraction since Q1 2021 due to a decline in private consumption and sluggish government spending.
The European Commission expects Finland’s economy to grow by a modest 2.3% this year and by a miniscule 0.2% in 2023, amidst the adverse impact of Russia’s invasion of Ukraine coupled with rising energy prices. The economy grew by 3% last year, following a 2.2% contraction in 2020.