Housing prices rising faster than wages – new production stabilises the market

Over the last ten years, dwelling prices in Helsinki have been rising clearly faster than have people’s incomes. In 2017, the price per square metre of dwellings in blocks of flats surpassed one-tenth of households’ disposable incomes. The ratio of square metre price to disposable income is rising in Espoo and Vantaa, too, although less than in Helsinki.

However, the price rise is moderated by a growing housing supply thanks to intense housing construction. In the Helsinki Region, the MAL (land-use, housing and traffic) goals for the numbers of dwellings completed will now be reached, i.e. 15,000 dwellings. The numbers of building permits and building starts indicate higher numbers of buildings completed in near future, too. A sufficient number of new dwellings keeps the housing market stable a few years ahead in the Helsinki Metropolitan Area, which will prevent heavier differentiation in housing prices.

The latest issue of Helsinki Region Trends analyses how dwelling prices have evolved. The publication highlights the articles by economist Lauri Vuori of the PTT Pellervo Economic Research Institute and senior researcher Oskari Harjunen of Helsinki City Executive Office. According to Oskari Harjunen’s research, the western extension of the Helsinki Metro has raised housing prices by four per cent in the near vicinity of the new metro stations.

Strong production growth continued in the Helsinki Region in late 2017

The Helsinki Region Trends also reveal that overall production in the Helsinki Region was 4.5 % higher in the last quarter of 2017 than it had been a year earlier. Furthermore, prices of second-hand dwellings in blocks of flats in the Helsinki Metropolitan Area were 3.3 per cent higher in late 2017 than in late 2016. The average dwelling price per square metre in the metropolitan area was €4,020. The publication also shows how air quality in the Helsinki Region was exceptionally good in October-December 2017 at all monitoring stations in Helsinki and its neighbouring cities.

Helsinki Region Trends is a trilingual current review of topical themes in the current evolution of the Helsinki Region. Data and findings are continuously updated on the website showing the region’s evolution in terms of indicators of regional economy, housing and business premises, wellbeing, traffic and environment, labour market and population.

More on the subject:

Researcher Jenni Erjansola, +358 9 310 36365, jenni.erjansola(at)hel.fi

Publication:

Helsinki Region Trends 2018