House prices fell by 0.48% y-o-y in Q3 2019
The average price of dwellings fell by 0.48% during the year to Q3 2019, from y-o-y declines of 0.93% in Q2 2019, 0.4% in Q1 2019, 0.56% in Q4 2018 and 0.54% in Q3 2018. During the latest quarter, house prices dropped 0.65% in Q3 2019.
Both demand and supply are falling. In the first nine months of 2019, total transactions of old dwellings fell by 8% y-o-y to 42,492 units, following a 3% decline in 2018, according to Statistics Finland. Likewise, dwelling starts in residential buildings fell by 14.6% y-o-y to 30,183 units in the first nine months of 2019 while completions were down by 2.5% to 28,992 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 6.2% in October 2019, slightly down from 6.3% 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 1.9% in Q3 2019 from a year earlier, an improvement from the previous quarter’s 1.2%, according to Statistics Finland. After growing by 1.7% last year, the economy is expected to expand by 1.4% this year and by another 1.1% in 2020, based on European Commission estimates.