YLE: In Helsinki’s high-quality suburbs, 10–30% of houses are empty

In 2020, the share increased by two percentage points in Kruununhaka, four percentage points in Kluuvi and five percentage points in Kaivopuisto.

The rise of unoccupied housing in certain high-quality residential areas is a sign of a new phenomenon, views Juhana BrotherusChief Economist of the Finnish Mortgage Association (Hypo).

“Statistics suggest that wealthy people buy second homes in expensive districts of Helsinki, but still live mainly elsewhere in Finland,” he told YLE.

Such people are typically close to retirement age and are driven by a desire to get a second home closer to their children and grandchildren or cultural services.

“[You could talk about] “opera houses” for the wealthy elite of the provinces, “Brotherus described.

When the first waves of the coronavirus pandemic halted short-term rentals on platforms like Airbnb, an increase in the number of vacant houses is unlikely as houses are offered to short-term tenants. The traditional rental market, on the other hand, only started to slow down the traditional rental market later in the pandemic.

“These statistics show that we are talking specifically about people buying a second home,” Brotherus said. – In a short time, the number of empty dwellings has increased in expensive neighborhoods by at least hundreds if not thousands.

According to YLE, real estate agents have also noticed the phenomenon.

“Our real estate agents have certainly come across this from time to time in the most expensive suburbs of Helsinki. When you have wealth, you can buy a home in town to be closer to your children and grandchildren, he said Kirsi TenhunenPresident and CEO of OP Kodi.

He pointed out that while such people primarily buy a second home, they also make an investment.

“If you decide to buy a house that will be left mostly empty somewhere, there are rarely places as valued as the center of Helsinki,” he explained.

Maarit PietarilaKiinteistömaailma The CEO of Ullanlinna said that some buyers have sold large apartments in the Helsinki metropolitan area to buy smaller ones and move to the countryside or abroad for teleworking or retirement.

“Then they come back to town to attend cultural events, meet friends or go to the office. They don’t keep a big apartment for that, he told the broadcaster. “Some may live in the counties, but their children have moved to the city, so they buy a townhouse for visits. Those living abroad have also bought apartments in southern Helsinki for their visit to Finland.

Empty properties are a problem, Brotherus recalled. Helsinki will lose tax revenue if apartments in expensive districts are used as second homes, as their owners pay municipal tax in any of the main municipalities. They will also raise house prices by reducing supply and potentially slowing down migration and reducing the potential customer base for stone-foot shops and services.

“Expensive downtown housing would be home to high-income people who would pay a relatively high amount of municipal tax on average and use quite a few municipal services,” he clarified.

In Vancouver, Canada, the problem was solved by introducing a higher property tax rate for vacant homes in 2017. The introduction has led to a decrease in vacant homes of more than 25 percent and a significant increase in tax revenue.

Brotherus believes that raising the property tax on empty homes is a good way to solve the problem, as it targets wealthy people and does not hinder employment or entrepreneurship, for example.

Aleksi Teivainen – HT

Source: The Nordic Page


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