Market development in January-March 2017
Housing Finland and CEE
Consumer confidence picked up further in the beginning of 2017 in Finland which was also seen as good consumer demand. Demand focused especially on affordable apartments in growth centres. Also the demand for bigger apartments continued to improve.
Investors were more selective in their investments and the demand focused on the capital region.
In the CEE countries, consumer confidence was on a good level especially in the Czech Republic. Residential demand was especially brisk in Slovakia and Czech Republic. Residential prices of new apartments increased slightly and the competitive situation in the CEE countries was reflected as cost pressure.
Mortgage interest rates were on a low level in all operating countries and the availability of financing was good. In Finland, new drawdowns of mortgages increased year-on-year.
Sources: Statistics Finland and Bank of Finland
Russian consumers were cautious in their purchasing decisions in the first few months of the year in spite of the economy becoming more stable. Growth in real wages was slow. The appreciation of the ruble further increased consumer caution.
Residential demand was weak. The ending of the state’s interest subsidy program for mortgages for new apartments at the end of the year led to higher interest rates for mortgages as well as higher expectations of a decrease in interest rates. This was partly reflected in the residential demand. Residential prices remained stable on average. The mortgage interest rates for new apartments eventually fell back to the level of approximately 11% during the quarter.
Business Premises and Infrastructure
Investors’ interest towards projects in prime locations was on a good level in the Finnish business premises market. The tender market was active especially in the capital region.
In the Baltic countries and Slovakia, investor demand for business premises was good.
The Finnish infrastructure market remained stable during the review period.