Increase in rents has come to a stop in several cities in Finland

THE INCREASE in rents has slowed down moderately in large cities and stopped completely in several medium-sized and small cities, reports YLE.

“Rents haven’t increased in the past year in, for example, Lahti, Jyväskylä, Joensuu, Seinäjoki and Pori,” Sakari Rokkanen, an economist at Finnish Landlord Association, commented to the public broadcaster on Monday.

Finnish Landlord Association and Vuokraovi.com have published a review examining the development of rents in 26 cities in the country. The increase in rents, it shows, began to slow down before the first wave of coronavirus infections as residential construction picked up significantly especially in large and medium-sized cities.

The increase in available rental units has, on the one hand, made it more difficult for lessors to find tenants and, on the other, offered more options to tenants. In Jyväskylä, for instance, tenants may have had to look for a tenant for one-room flats for more than a month, with the number of rental units on the market rising from 500 at the end of 2015 to 1,400 at the end of 2020, according to YLE.

The phenomenon is evident particularly in cities that typically have a high share of student residents, as many students have opted to study remotely from their home municipality due to the suspension of in-person instruction.

“A third of Jyväskylä’s population are students and naturally a lot of rental flats go to students. When they stay in their home municipality to study remotely, of course it has an impact on the market,” said Johanna Pietilä, a real estate investor operating in Jyväskylä.

Overall, the housing market rebounded surprisingly quickly from the initial shock delivered by the epidemic in the first half of 2020, as a result of a rise in household savings.

“You couldn’t travel abroad or go out for dinner as usual because of restrictions. So these savings were released into the housing market at the end of last year, meaning people started buying and renting a bit bigger houses especially,” said Rokkanen.

The demand for three-room and larger units has grown as a consequence of teleworking, making it slightly more difficult to find takers for two-room units.

“We also offer some family houses and there’s more demand for them. People look for more space and want to live further away from the centre,” analysed Pietilä. “If both family members are working remotely and they also have children, a two-room house may become a too small and difficult form of housing in this age of teleworking.”

Aleksi Teivainen – HT

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