Operating environment

Housing

At the end of 2005, Finland had 2,667,000 dwellings, 45% of which were one-room or two-room flats. The housing stock also includes dwellings that are empty or between residents, of which there were about 237,000.

44% of dwellings are in apartment blocks, 40% are detached or semi-detached houses, and 14% terraced houses.

Households and living conditions

There are about 2.4 million households in Finland, about 800,000 of which live in rental housing. In recent decades, the size of the households has decreased and is still decreasing. The share of one- or two-person households is more than 70%.

The average household has an area of 79 m² at its disposal, which equates to 37 m² per person. In rental housing, the average surface area per household is 54.8 m², which is 31.3 m² per person.

Smaller households tend to live in rental housing rather than in owner-occupied housing. More than half of all households in rental housing are of the one-person variety. Of under-30s living alone, a full 80% live in rental housing. In recent years, over-65s have been the only age group in Finland that is clearly growing, and their needs will be evident in the housing market in the form of increasing requirements for freedom of movement and demand for services.

Migration

Migration and immigration have been at record levels in recent years. In 2005 and 2006, a total of almost 45,000 people moved to Finland. In the same period, migration between municipalities was recorded at over half a million.

Migration has been evident in strong demand for housing in areas of net population growth. In addition to migration, house demolition, increase in population density and increasing wealth are maintaining strong demand for housing.

Housing production

In recent years, the volume of housing production has exceeded 30,000 units per year. Almost half of these have been detached or semi-detached houses. There has been little construction of rental housing. The annual production of socially-supported housing has been 3,000 units.

Although low interest rates and extended mortgage payback periods have maintained strong production of owner-occupied houses, in future the growth centres will also need more moderately-priced rental housing.

The development of rental and house prices

Nationally, the price index of dwellings in apartment blocks has risen at an annual rate of about 8%. In the corresponding period, rents have only increased by 1.7%.

Consumers´ confidence in the favourable development of their own finances looks to be continuing strongly. During the past year, interest rates have been rising and the rise in house prices has also been very rapid. This rise, however, is forecasted to begin flattening out.

One reason for the rise in house prices is thought to be a scarcity of available plots of land. In addition, house building resources are currently at full stretch. Competition between builders is taking place not only in terms of location but also in the price-quality relationship.

Source: Statistics Finland