Overall demand for rental housing remained stable. The disparity of the market further intensified as the Helsinki Metropolitan Area continued to strengthen as an urban growth centre. The weak economy and uncertainty with regard to economic development were seen in, for example, a fall in the prices of owner-occupied apartments.
Demand for rental housing was high in the Helsinki Metropolitan Area. Once again, the highest demand was for studios and one-bedroom apartments, for which demand currently exceeds supply. An increase in privately financed new construction eased the situation in certain areas, to the extent that it caused temporary spikes in supply in some localities when several different players' properties were completed simultaneously. In other urban growth centres, demand for rental housing mainly continued along the same lines as in the previous year, again centring on smaller apartments, as in the Helsinki Metropolitan Area. In areas where the economy is slowing down, the situation was reversed with supply exceeding demand. For many players, this was reflected in occupancy rate problems. Demand for the most expensive rental apartments continued to decline.
New construction clearly focused on privately financed rental apartments. However, it was impossible to take full advantage of the slight fall in contractors' prices, because slow zoning processes and expensive design solutions resulting from strict plan provisions weakened the conditions for the production of rental housing.
Local market situations were also reflected in resident turnover: the lowest turnover for both privately financed and state-subsidised housing was experienced in the Helsinki Metropolitan Area and, as in previous years, the highest in Oulu.
Rents across VVO's apartments as a whole increased by an average of approximately 3.5 per cent year-on-year. Rents for privately financed apartments increased by about 3 per cent, while those for state-subsidised ARA apartments increased by over 4 per cent. The rent increases for state-subsided apartments exceeded the rise in apartment building maintenance costs. Rent increases were mainly caused by growing renovation requirements for ageing property stock and insufficient provisions for previous repairs.
Rents are expected to rise again in 2015, but at a more moderate rate. Due to increasing repair costs, rents for state-subsidised ARA apartments are expected to rise slightly more than those for market-based ones.
|State-subsidised or interest-subsidy rental apartment||642,197||648,949||631,351||619,530||590,345|
|Other rental apartment||623,991||629,374||649,014||670,439||712,886|
Source: Statistics Finland
Source: Confederation of Finnish Construction Industries RT’s housing production surveys, 1/2015