A lot of hot real estate markets are springing up around the world. According to forecasts, the regions with very cold climate will soon become the hottest investment markets.
Already now Arctic Europe is the third largest economic region in the world, and in the near future may become the largest investment sector in Europe thanks to previous investments and the efficient use of natural resources. It is expected that the total investment in Northern Finland, Sweden and Norway over the next 10 years will amount to €140 billion.
Pauliina Pikkujämsä from the Finnish Agency BusinessOulu says about the increase in demand for property in the region. And it becomes more and more foreign buyers. For example, in Finland over the past 3 years the investment activity increased by 27%, and the total volume of investments in 2009 increased more than 3 times. This was largely due to foreign buyers of real estate.
"Currently, foreign buyers account for about a third of the total volume of the Finnish property market. For the last 6 years their share has increased more than in 2 times (from 16% in 2009 to 34% in 2015), says Pauliina Pikkujämsä. As an example, we can take the investment of the German company Patrizia, which has increased in the Nordic region in 4 times in just a few years."
Who and why invests in Arctic Europe?
The main reason for the growth of attractiveness of cold Arctic areas lies in the fact that investments in these countries are the most safe and promising.
The inhabitants of Northern Europe were the first who understood it. The share of European investors accounts for 50-70% of the total foreign investment. Asians also quickly understood the potential of this region. Currently, Asian investors make up a large part of the remaining 30%.
Investments from North America were pushed to the background, giving way to other countries. High interest remains now from the Middle East.
The growth of prices for real estate in the region
According to the national statistical offices of Finland, Norway and Sweden in the last 5 years prices for real estate here has increased significantly. In Northern Norway – by 27.8%, and in the area of Upper Norrland (Sweden) - by 36.5%. In the Northern part of Finland housing prices grew more moderate, but steady. The cost of square meters here rose to 6%.
According to information of Eurostat, in the Arctic sector, the growth of prices exceeded the European average, and some Arctic regions of Europe are now among the hottest markets in Europe. On average, for 5 years, the prices on housing in Europe grow by 3.4%, and in Finland - by 6.6%. What can we say about Norway, with its 33.7% or Sweden, where the price per square meter jumped by 38.5%!
Participation in MIPIM
The Arctic region took part in a recent international real estate exhibition (MIPIM) in France. Participants from the cities of Oulu (Finland), luleå (Sweden), Troms (Norway) felt a great interest from foreign investors.
Potential investors were attracted not only by new buildings and big public buildings projects (e.g. hospitals), but by tourist objects, centers of storage and data centers as well. The last ones turn the traditional disadvantage of the region (cold climate) to advantage, as the natural cold is used to reduce the temperature inside these data centers.
Oulu is a high-tech, world-class city. 2.6 million people worldwide every day use the information, communications and wireless technologies, developed in Oulu. The region boasts the fact that its population is the youngest in Europe. Luleå is the home base of Facebook in Europe. Troms is famous for highly qualified personnel in various fields.
Text - Alyona Eliseeva, ee24
Photocredit Depositphotos.com