HS: The housing market has slowed down strongly in Tampere, Turku

HS: The housing market has slowed down strongly in Tampere, Turku

The Tampere newspaper pointed out in its report that the number of new apartment sales was also affected by the fact that some of the houses completed last year had already been sold in 2021.

A total of 4,377 new apartments were completed in Tampere in 2022, of which 3,487 are vacant apartments. Markku RiihimäkiThe CEO of Tampere-based construction market expert Forecon stated to the newspaper that most of the apartments are currently ready or built for use by investment service companies as rental apartments.

Tampere still attracts people from other parts of the country, but Riihimäki estimates that there won’t be a shortage of apartments, even though housing construction will shrink significantly this year.

“Construction will return to a significantly lower level. The situation is normalizing. Tampere had a huge spike in the construction industry,” he said.

Construction companies started building a total of 5,463 apartments in Tampere in 2021, which is about 2,000 apartments more than in 2020. The number dropped to 3,180 apartments in 2022. Riihimäki believes that the number of apartments completed this year will settle at around 3,500 apartments, before it decreases by 10 . -15 percent in 2024.

“We are still at a solid level in terms of project completion, and that ensures that the supply remains good.”

Construction companies are currently cautious due to high costs of both construction and capital, as well as uncertainty in demand. Voutilainen told Aamulehte that the builders are currently filling their plot portfolio, but are postponing decisions to start construction.

“The builders have hit the brakes. The volume of construction is decreasing, he estimates and estimates that the construction of new apartments in Tampere could decrease by up to 20 percent.

Oikotie’s real estate marketplace Oikotie Asunnot reveals that the marketing times for apartments in Turku have been extended from approximately 50 days in January 2022 to 80 days in January 2023. According to Helsingin Sanomat.

Juhana BrotherusThe chief economist of the mortgage association told the newspaper that the market has developed in the same way in all major cities in Finland. Although sales fell by around 40 percent at the start of the coronavirus pandemic, they have recovered quickly and remained strong between mid-2020 and mid-2022.

“Since then, sales have dwindled,” he commented.

According to him, last November was the darkest month in brokerage statistics.

“Early signs from the start of this year suggest that sales have remained roughly at December levels – still well below normal,” he noted.

While the increase in marketing times from 50 to 80 days is noteworthy, he noted that it may also be a bit misleading given how exceptionally hot the market was in January 2022. “We’re going from hot to cold in six months.”

According to him, the development is due to three reasons. Interest rates, consumer prices and general uncertainty caused by Russia’s war in Ukraine.

The ongoing increase in interest affects activity, especially in markets where apartment prices are higher than the national average, such as in Turku. “As interest rates on typically debt-financed homes have risen from zero at the beginning of last year to three and a half percent, if not higher, that can’t have an impact on the housing market,” Brotherus said.

The rise in food and energy prices, in turn, has forced households to limit their housing budget.

“The third factor, the uncertainty caused by the war, typically leads to consumers being very cautious. In such an uncertain situation, households usually postpone larger purchases.”

Brotherus added that similarly priced apartments will continue to be sold in Turku, for example. However, not all sellers are ready to sell at the current market prices, but may be ready to wait even a year for the price to rise, he analysed.

Aleksi Teivainen – HT

Source: The Nordic Page

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