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Operating environment

Short-term outlook by region

As published in the Half-year Report January-June 2019


Consumer and institutional investor demand for apartments is expected to remain stable at the autumn 2018 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.

The 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.

The 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.

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


Demand for apartments is expected to remain at the same level as seen on average in 2018. The recent key rate cut by the Central Bank of Russia to may lead to a slight decrease in mortgage interest rates.

Changes in regulation concerning the housing market are expected to maintain volatility in supply and sales practices. Recent regulatory changes might cause delay in banks’ project financing abilities and cause uncertainty and turbulence in the market. Demand is expected to focus primarily on affordable apartments. Inflation in construction costs is expected to grow moderately due to changes in value added tax.

The Baltic countries and CEE countries

Residential demand is expected to remain at a good level. Residential prices are estimated to increase further. The prices of plots have increased and competition for plots is expected to remain intense. The availability of financing and low interest rates are expected to continue to support residential demand. The shortage of resources and long construction permit processes are expected to continue to increase inflation in construction costs and to limit volume growth. The contracting market for business premises is expected to remain at the current level or 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.


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 11 countries: 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, except for Poland, where the operations have just been launched.

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.