According to Lasse Corin, from Aktia Chief Economist, youhe housing rental market in Finland has seen exceptional changes during the pandemic. Jhe rise in rents for one-room apartments in apartment buildings in the Helsinki metropolitan area has subsided considerably. At the same time, the difference in rents between T1 and T3 or more has narrowed.
In a review published today by Aktia, Chief Economist Lasse Corin indicates that in previous years, the increase in rental accommodation occurred mainly in single-person households. in 2020, the first year of COVID, the number of households of three or more people living in rental accommodation has increased significantly.
“The demand for larger rental apartments has increased and there are several reasons for this,” explains Lasse Corin. “Remote work is probably the main reason for this. Households that are already tenants may find that they need additional space. It is also possible that households who are still uncertain about the need for additional space. Instead of immediately buying a bigger house, people want to test the need for additional square meters in the form of a rental apartment, before making the actual purchase decision”.
Housing prices have risen sharply, especially in growth areas, which may well increase the popularity of rental accommodation. In 2020, the prices of old T3 condominiums increased by an average of 2.7% and the prices of T1 by 2.2%. It is not uncommon for prices for large apartments in growth centers to increase by more than 5% per year. Prices for apartment buildings with three or more rooms rose 3.3 percentage points faster than prices for one-room apartments in the third quarter of last year. The difference was the biggest since 2000.
“At the same time, the difference in rent increases between one-bedroom apartments and large apartments has disappeared. Before COVID, the situation was different, as rents for studios increased much faster than those for larger apartments. Corin continues.
In recent years, real estate investors have clearly focused on smaller accommodations, such as one-room apartments. However, the pandemic has changed the evolution of the rental market. Many factors suggest that the market for larger rental apartments in growth areas will pick up in the long term.
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