House prices fell slightly by 0.49% y-o-y in Q1 2019
The average price of dwellings fell slightly by 0.49% during the year to Q1 2019, from y-o-y declines of 0.56% in Q4 2018 and 0.54% in Q3 and annual rises of 0.61% in Q2 and 0.22% in Q1. During the latest quarter, house prices dropped 0.43% in Q1 2019.
Demand plummeting. In Q1 2019, total transactions of old dwellings plummeted by 25.6% y-o-y to 11,297 units, following a 3% decline in 2018, according to Statistics Finland. On the other hand, residential construction activity is mixed. Dwelling starts in residential buildings fell by 3.3% y-o-y to 8,602 units in Q1 2019 while completions were up by 5.2% to 8,777 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.
However the economy is now gradually improving, with the unemployment rate falling to 7.1% in Q1 2019, from 8.8% a year earlier.
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 expanded by 2.2% in Q1 2019 from a year earlier – at par with the prior quarter’s growth. After growing by 2.7% last year, the economy is expected to expand by a modest 1.9% this year and by another 1.7% in 2020, according to the Bank of Finland.