The real estate market is stabilizing in Finland, despite the weakening economy. The price index for all types of housing has increased by 1.94% per year (0.29% inflation adjusted) for the first quarter of 2013, according to ee24.com.
According to the statistical agency of Finland, in May 2013 the average price of a resale property increased by 1.4% compared with the same period last year, amounting to €2,204 per sq.m. In Greater Helsinki the average cost of second homes has increased by 2.4% to €3,505 per sq.m. And in the rest of the country, the price tag on the "secondary housing" rose by 0.6% to €1,693 per sq.m.
Apartment buildings in Finland grew by 2.5% to €2,338 per sq.m., while in Greater Helsinki prices went up by 3.8% to €3,674 per sq.m. Single-storey house fell on average by 0.4% to €1,994 per sq.m.
Dynamics of prices on the secondary market adjusted for inflation
|
|
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Finland
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Helsinki
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Other regions
|
|
1983 – 1989
|
64.0%
|
68.5%
|
|
|
1989 – 1993
|
-49.2%
|
-53.4%
|
-44.4%
|
|
1993 – 1994
|
6.6%
|
10.3%
|
3.2%
|
|
1994 -1995
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-4.8%
|
-6.3%
|
-1.9%
|
|
1995 – 1999
|
45.0%
|
62.8%
|
38.0%
|
|
1999 – 2001
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-6.9%
|
-5.5%
|
-12.0%
|
|
2001 - Q2 2008
|
42.0%
|
45.7%
|
33.4%
|
|
Q2 2008 – Q1 2009
|
-6.4%
|
-8.6%
|
-4.0%
|
Finnish real estate market experienced a shock when in 2008 the interest rate rose to 5.53%, against the background of rising inflation and rising prices for food imports. In the first half of 2009, mortgage loans issued €1.8 billion per month compared to €2.6 billion per month for the same period in 2008.
The reasons for the weakening of the Finnish economy
The Finnish economy was strongly affected by the global crisis. According to the portal Global Property Guide in 2009, the recession was 8.5%. The budget was a large hole, in part because of a shortfall of taxes. In 2011, the Finnish economy has improved its position, showing an increase of 3.3%.
However, even though having a reasonable fiscal policy eurozone has not yet overcome the debt crisis, and Finland pulls into a new recession. The Finnish economy contracted by 0.2% in 2012, according to the Bank of Finland. In the first quarter of 2013, GDP declined by 0.1% compared to the 4th quarter of 2012 and by 2.1% compared to Q1 2012. The main reasons were the decline in exports of paper machines and vehicles associated with the overall decline in European demand. Experts suggest further economic contraction of 0.4% in 2013.
The unemployment rate in Finland increased by a maximum of four years, the level of 10.8% in April 2013 compared to 8.8% in April 2012 and 9.5% in April 2011. Inflation in 2013 will be around 1.7%.
In 2012, the budget deficit was 1.9% of GDP compared to 0.5% in 2011 and 2.5% in 2010. In 2013, the deficit will be 1.5% of GDP, according to the Finnish government. Sovereign debt in Finland in 2012 was 53% of GDP, compared to 48.6% of GDP in 2011 and 48.4% of GDP in 2010.
Despite the weakening economy, Finland is the only country in the euro zone, which still retains a AAA rating from all three leading international rating agencies. Thus, the Finns at the moment have the highest rating of financial liabilities in Europe.
Text: Ivan Ulitin , ee24.com