House prices fell by 1.11% y-o-y in Q2 2019
The average price of dwellings in Finland fell by 1.11% during the year to Q2 2019, after y-o-y declines of 0.4% in Q1 2019, 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 increased by a meagre 0.71% in Q2 2019.
Demand is steady. In the first seven months of 2019, total transactions of old dwellings was 31,902 units, almost unchanged from the same period last year, after a 3% decline in 2018, according to Statistics Finland. Dwelling starts of residential buildings fell by 9.2% y-o-y to 21,596 units in the first half of 2019 while completions were up by 3.7% to 19,702 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 gradually improving, with the unemployment rate falling to 6% in July 2019, down from 6.5% 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 1.2% in Q2 2019 from a year earlier, following a downwardly revised growth of 0.9% in the previous quarter, according to Statistics Finland. After growing by 1.7% last year, the economy is expected to expand by 1.5% this year and by another 1.2% in 2020, based on European Commission estimates.