HELSINKI: Housing costs are set to increase significantly in coming years, as opposed to household net incomes. Pellervo Economic Research (PTT) has predicted that housing costs will increase by almost 3 per cent per annum during the next couple of years. During the same period net income is expected to rise by only 1 per cent. An average of 27 per cent of household incomes was spent on housing. In 2018, PTT predicts that the amount will rise to 28 per cent.
Housing costs will increase due in particular to rising repair costs which form a significant part of operating expenses and are rising due to Finland’s ageing buildings. Additionally, electricity supply prices and property tax are seeing a significant pressure to rise, especially for those living in detached houses. Housing costs are set to rise the most for those living in blocks of flats. Rental accommodation and owner-occupiers should, according to the PTT, see a more restrained rise in price. Proportional to income, housing expenditure in cities is remarkably higher than elsewhere in Finland. Housing costs are however also growing quickly elsewhere.
A middle income family that is residing this year in a privately owned 60m2 sized flat in the Helsinki area is estimated to be spending almost 60 per cent on housing. In Tampere, for example that figure would be around 40 per cent. According to PTT’s Tuuli Tähtinen, elevated housing costs in city dwellings are almost exclusively caused by high housing prices.
