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Operating environment

Short-term outlook by region

As published in the Interim report January-September 2019


Consumer and institutional investor demand for apartments is expected to remain on a good level. Activity among private residential investors is expected to be lower than in the previous years. Location and price level continue to play a key role. Demand for new rental apartments in good locations continues to be on a good level supported by low interest levels. Stricter lending practice by financial institutions and potential changes in legislation may impact consumer demand in the future.

Divergent development of apartment prices and demand between growth centres and the rest of Finland is expected to continue. The increased supply of apartments is anticipated to prevent the rise of housing prices.

Rental demand for business premises is expected to remain on a good level in growth centres. Activity among property investors is expected to remain at a good level, particularly for centrally located projects in the Helsinki metropolitan area and in major growth centres. The contracting market is expected to remain active.

Renovation is expected to grow moderately due to increasing urbanisation and aging of building stock.

Construction costs are estimated to stay on a stable level. Construction volume is expected to return to a normal level.

Increased regulation and higher capital requirements imposed on financial institutions affect construction and property development. Financial institutions have tightened housing company lending in the market.

In infrastructure construction, complex infrastructure projects in urban growth centres as well as transport projects and industrial investments maintain demand. In 2019, the infrastructure construction market is expected to decline from the 2018 level but to revive in 2020. With the annual total increase of EUR 300 million in management of basic transport infrastructure in the new government policy, infrastructure construction volumes may be stabilised.


Demand for apartments is expected to remain at the same level as seen on average in 2018. Demand is expected to focus primarily on affordable apartments; this is also supported by demographic trends. The recent key rate cut by the Central Bank of Russia has lead to a slight decrease in mortgage interest rates.

Changes in regulation concerning the housing market are expected to continue to cause uncertainty and turbulence in the market, to maintain volatility in supply and sales practices as well as to increase housing prices in the longer term.

The Baltic countries and CEE countries

Residential demand in the Baltic countries is expected to remain on a good level. Availability of financing and low interest rates are expected to continue to support residential demand. Weaker outlook for the German economy might impact residential demand in the CEE countries. Residential prices are estimated to increase further.

The prices of plots have increased and competition for plots is expected to remain intense. Shortage of resources and long construction permit processes are expected to continue to increase construction cost inflation and to limit volume growth.

The contracting market for business premises is expected to remain at the current level or to decrease slightly in the Baltic countries.

In the Baltic countries, the volume of infrastructure construction is expected to continue to grow due to the states’ investments in improving urban and transport infrastructure, but competition is expected to remain intense.


In Norway and Sweden, infrastructure construction is boosted by multi-year, state-funded traffic infrastructure development programmes and urbanisation. In both countries, infrastructure construction is expected to grow in 2019. Large-scale road, railway projects and industrial investments are ongoing or planned in Sweden and Norway, which will increase demand for infrastructure projects. In addition, especially Norway is investing in the development and renewal of energy production.


YIT operates in Finland, Russia, Scandinavia, the Baltic States, the Czech Republic, Slovakia and Poland.

In Finland, we are the largest residential developer and one of the biggest business premises and infrastructure constructors. In Russia, we are the largest foreign residential developer and one of the top operators in the CEE countries.

As of April 1, 2019, YIT's five reportable segments are Housing Finland and CEE, Housing Russia, Business premises, Infrastructure projects as well as Partnership properties.