Finnish real estate market will recover quickly from war in Ukraine, says SKVL
THE FINNISH The real estate market has started to recover from the shock caused by the Russian invasion of Ukraine, according to the Central Federation of Finnish Real Estate Agencies (SKVL).
SKVL estimated in its latest market forecast on Tuesday that the market will improve as the uncertainty that surrounded the market in the first days and weeks of last month due to the security situation begins to dissipate.
Jussi Mannerbergthe managing director of SKVL, pointed out that what should already be a strong spring could be even better depending on international developments.
“If we get a decision from Finland on NATO or a peace in Ukraine, that would be another plus,” he said in a press release. “The spring sunshine has brought new and firm confidence to the market in a brighter future, while economic disruptions are expected to be less severe than expected and have only a minor impact on real estate trading.”
SKVL compiles its market forecast based on the results of a survey distributed to real estate brokers across Finland.
Forecasts indicate that relatively new single-family homes will be in particularly high demand this spring and summer, leading to price increases in all regions of the country. In Kanta-Häme, Pirkanmaa and Southwest Finland, for example, more than half of brokers predicted prices would rise.
One of the underlying factors is inflation. Mannerberg explained that an inflationary environment encourages people to invest in fixed assets, such as real estate.
Demand is also expected to increase for holiday homes in good condition near a body of water, according to SKVL. “Having your own year-round cabin away from town has become increasingly popular since the war began,” Mannerberg said.
Inflation, however, also slowed cabin sales by increasing construction costs.
SKVL also expects rents for smaller apartments in particular to continue to fall at least moderately. Demand for larger rental apartments will continue to increase due to limited supply.
Sanctions against Russia have led to a significant decline in the share of Russian buyers and sellers in the Finnish real estate market.
Russian nationals have been a feature of the market, particularly in the capital region and the east of the country, accounting for 5-10% of transactions according to some of the member firms of the central federation. Their share of the overall domestic market, however, has been “negligible”, SKVL said.
Aleksi Teivainen – HT