House prices fell by 1.09% y-o-y in Q1 2020
The average price of dwellings fell by 1.09% during the year to Q1 2020, a weaker performance compared to a slight increase of 0.16% in Q1 2019. During the latest quarter, house prices rose by 2.07% in Q1 2020.
Demand is falling. In the first quarter of 2020, total transactions of old dwellings fell by 6.1% y-o-y to 13,206 units, following an increase of 1.4% in 2019, according to Statistics Finland.
Construction activity is mixed. Dwelling starts in residential buildings rose strongly by 43.5% y-o-y to 9,861 units in the first quarter of 2020 while completions were down by 15.3% to 7,707 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. Over 40,000 highly-skilled Finnish ICT workers were unemployed. Aside from Nokia’s weakened activity, exports were plagued by the economic recession in Russia ― Finland’s major trading partner.
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 is expected to contract sharply this year, with an estimated real GDP decline of 5.5%, due to the coronavirus pandemic, according to the Ministry of Finance. The government has imposed strict measures to restrict movement.
The economy expanded by about 1% in 2019, a slowdown from the prior year’s 1.7% growth, amidst weaker global economic activity, based on figures from Statistics Finland. It was the lowest growth in four years.
