Real Estate in Finland
The real estate market in Finland has been blooming since year 2001 and had lasted until the year 2008 when recession hits the global economy, causing serious damage to the country’s real estate transactions. Prices of real estates went down throughout the country with Helsinki Metropolitan Area according to Viva LKV, the capital of the country, suffering a slightly harder hit from the economic downturn.
Finland is a country that has a history of a very cyclical economy. It is highly exposed to the world markets but is also sensitive towards global shocks. Therefore it is not surprising that the country is suffering from another economic contraction. Helsinki was more affected but is not unusual because of its export oriented industrialization.
However, the real estate buying power has seen a great increase in the first quarter of 2009 due to declining Finland property prices and the big dip in new mortgage interest rates. Property prices for both old and new housing fall at least 6% in real terms, while their average interest rates took a dive from 4.4% to 2.6%. Some other great advantages for real estate buyers are that they have simple purchasing procedure and the cost of living is much lower than most other European countries.
Today, Finland real estate prices has risen higher and started to show signs of recovery over the recession. This is made possible by their government that handles its economy well, as well as from the help of strong exports over the past years.
Investing in Finland properties is better now but putting all your money in international renting is not a good choice. First, they have a very high income tax on rents and secondly, their rental yields are also pretty low particularly in Helsinki, with an average of 4.4% rental returns for the entire country. Hence, international investors are targeting on Finland’s low cost, high yield investment on properties. The transaction costs are not only low, but the whole transferring procedure only takes them an average of 14 days to complete.