Covid has pushed homebuyers to the suburbs – but city housing costs remain high | Yle Uutiset
As the coronavirus pandemic has seen an increase in the number of people leaving cities, house prices in Finland’s growth centers have continued to rise, according to Peetu Keskinen, economist at Pellervo Economic Research (PTT).
Helsinki, Tampere, Turku and Oulu are among the Finnish cities that have seen an influx of people to their outskirts during the pandemic.
In January-June of this year, municipalities near large urban areas were the most popular locations for movers, Timo Aro, a leading specialist at regional development consultancy MDI, told STT news agency in early August.
Tuusula, Järvenpää and Sipoo, all located around 30 kilometers from central Helsinki, and Kaarina, 10 kilometers from central Turku, welcomed the most new residents in the first half of 2021.
The pandemic has shown that the trends of the 2010s, which saw continued migration from rural to urban areas of Finland, were reversing, Aro said.
Record Mortgage Loans in June
“The message from the banks has been that there have been a lot of loan seekers,” Keskinen said.
However, he added that Finland is not on the verge of a property market price bubble like Sweden. In Sweden, house prices have moved faster than in Finland, due to Sweden’s more flexible credit policy. As a result, prices in large urban areas have increased rapidly.
Finnish urban centers remain attractive, Keskinen said, with the number of potential buyers sometimes exceeding the supply of available housing.
“When immunization coverage gets to a good level, people will definitely want to go to work and see other people,” Keskinen said.
Middle-income earners who were able to save money during the pandemic were a major contributor to June’s mortgage lending record.
“When the majority of the service-dependent economy is shut down, the housing market is a place to spend money,” Keskinen said, adding that some of those savings have been spent on both building work. renovations and the purchase of new homes.
Price movements during the interest rate pandemic varied from city to city, PTT found, influenced by factors such as the state of the job market. In the south-eastern town of Kotka, house prices initially fell, but then returned to normal.
High price points can drive people out of growth centers
Keskinen also called for action to ensure Finnish cities remain affordable.
While housing construction rates are relatively high, especially in Helsinki, so is demand, which is why increased housing supply does not translate into lower prices.
“Some people are forced to live in Helsinki for work or school, which puts them on an equal footing with those living in cheaper areas, a problem which should be resolved in the coming decades,” said he declared.