Tenants in the Helsinki metropolitan area enjoy a wider choice, lower rents when supply exceeds demand

There are now more than twice as many apartments for rent in Helsinki as before the Covid pandemic, although larger landlords are not yet cutting rents.

Tenants were expected to return to the market when Finland left behind the Covid restrictions, but it will take longer and longer to find rental housing, at least in the Helsinki metropolitan area.

"Before, the marketing time in Helsinki was clearly shorter than in the rest of the country, but now it is longer," said Juhana Brotherus mortgage lender Hypo. "Renters have never had access to this range of properties or so much power."

The largest availability has increased in Espoo, where, according to Brotherus, there are three times more rental apartments on the market than in the autumn of 2019.

There are twice as many apartments available in Helsinki.

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The market in the Helsinki metropolitan area is recovering more slowly

It’s not that the apartments aren’t good enough for tenants Henrik Laakkonen from the rental website Vuokraovi.com.

"Demand has not fallen, but supply has grown faster," Laakkonen explained.

If you are looking for an apartment, this is good news. There is a lot to choose from and you may find better apartments on your budget than you expect. The most popular apartments for rent at the moment are studios, and there are more of them in service than other apartments.

According to the Finnish Landlord Association, landlords have to compete for good tenants.

"It is still difficult to find a tenant in the Helsinki metropolitan area," said Sakari Rokkanen from the association. "Elsewhere in Finland, there have been positive signals during the summer and autumn that demand has returned to the market, but development in the Greater Helsinki area has been slower."

Lots to rent on the market

Supply has increased during the pandemic, as Airbnb and other short-term landlords have seen a decline in passenger numbers, which has led them to move to a normal rental market instead.

According to Rokkanen, this means an increase of about 1,000 properties in the Helsinki market.

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Short-term rentals account for a larger share of the market in Helsinki than elsewhere. Tourists have still not returned to pre-pandemic levels.

"The situation in the tourism, restaurant and culture sector has been weak and the work has not attracted new residents to Helsinki or the Helsinki metropolitan area in the same way as before." said Rokkanen.

However, he said he did not believe the situation would continue for long.

"Housing prices give some indication that people are believed in Helsinki, even though there is currently no employment situation or everyday life that looks like the city at its best." said Rokkanen.

Brotherus agrees. In the short term, property prices may have risen too much, but in the long run they may not have risen enough.

"Especially in Espoo and Vantaa, compact rental apartments are now under construction, which will certainly be in demand and demand in the long run," said Brotherus. "However, they are not being met quickly, especially in a situation where the services and tourism sectors continue to face major difficulties."

Are rents going down?

When supply exceeds demand, prices can be expected to fall. It does not yet appear in rent level statistics, although there are indications that the rise in rents has stalled.

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According to Statistics Finland, rents rose by 0.9 per cent in the Greater Helsinki area and by about one per cent in the rest of Finland from the previous year. Rents rose most sharply in Turku, where rents rose by 1.7 per cent, and in Tampere, where they rose by 1.5 per cent.

However, Brotherus said this does not tell the whole truth.

Statistics Finland’s figures include only rents received by large corporate landlords and rents paid by housing subsidies. Individuals renting from private landlords without housing allowance are not included in the data.

"Rents for both these most creditworthy tenants and new tenants appear to have fallen by many indicators," said Brotherus.

On the other hand, institutional investors and larger landlords are better able to handle a month or two of vacant properties to maintain rent levels.

Rokkanen adds that the typical time to raise rents is at the source of tenants, and many landlords choose not to raise rents, as they have done when demand is strong.

Source: The Nordic Page


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