Demand for Rental Properties Outstrips Supply
Rental agents in Finland's capital city region are reporting a critical shortage of homes with a queue of almost 40,000 prospective tenants being put on hold.
Companies in Helsinki, Vantaa and Espoo say that the demand for rental homes has remained constant throughout the year with particular tenant appetite for studio apartments.
At the end of May, rental agents reported 38,600 live applications for rental homes although the three cities have managed to supply less than 500 homes each month for the backlog of applicants, with single tenants facing the toughest competition for homes.
60% of the tenant applicants recorded at the end of May were reported to be in urgent need of housing, either having no place of abode or being obliged to move out of their current homes.
According to Euroconstruct's November 2014 estimate, the construction of 26,500 apartments will start in Finland during 2014. In another report published by VTT Technical Research Centre of Finland the annual demand for new apartments is shown as amounting to 24,000-29,000.
Finland's housing prices are expected to remain stable in 2014 with mortgage rates forecasted to remain low and improved consumer access to mortgage finance.
The Economic Survey of Finland 2014 published by the Organisation for Economic Co-operation and Development (OECD) showed that strong growth, innovation and structural reforms in the decade preceding the global economic and financial crisis transformed the country into one of the world's most competitive economies, ensuring a high level of well-being for its citizens.
Finland's popularity as an investment destination has rapidly increased since the financial crisis, after transforming its economy to become one of the richest countries and most stable societies in the world.
Today, Finland is leading or near the top of most international comparisons in terms of growth and development in the economic, technological and social spheres.
The largest sector of the Finnish economy is services, followed by manufacturing and refining. The country's main industrial products are paper and board, electronics and metal products with engineering and high-tech industries being the main drivers of manufacturing.
Given Finland's economic stability and the massive demand for rental properties near the capital city, there is an attractive opportunity to invest in this growth market. According to the Numbeo database, the average rental for a 1 bedroom apartment in the city centre is ?926.99 and outside the city, ?727.98. Property prices are shown as ?5910/m2 in the city centre and ?3722/m2 outside the city in the database, updated in June 2014.
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