Ulla and I are apartment-hunting on the cover of the October issue of Suomen Kuvalehti, which is like Time in the Finnish-speaking world. The story is about the possibility of a real-estate bubble. Ulla and I both expect prices to adjust slightly but think it’s unlikely that interest rates will shoot up drastically in the near future. We didn’t buy the apartment, and I don’t know any chords although I play guitar in the picture.

Comments

Feed   Trackback Address
Sulka Haro
October 9th, 2005 at 3:17 am (#)

The apartment mentioned in the article is incredibly expensive – I’d never pay that much for a square meter in Helsinki. If you make a good deal, you can get a nice flat in areas even like Kumpula for less than half of the cost mentioned in SK.
Of course, if you want to live within a walking distance of the central railway station you’ll have to pay an extra 100k for the privilege. But then again, with the price difference, you could use a cab to go to work every day for ten years from a flat a little further away.
I made the choice of getting a cheaper (but nice) flat outside the very center of the city and haven’t regretted it once. Also I’m not scared of the interest rising since we budgeted the loan so that we could afford higher rates. Don’t know your needs but I recommend making the same choice. :)

Jyri
October 9th, 2005 at 5:30 am (#)

Yup, the price per square meter for that apartment was pretty optimistic. Even though it’s more expensive, we’ll live somewhere quite central if we stay in Helsinki.
With regard to the interest rate, the papers write that the European Central Bank is considering raising the interest rate slightly to fight inflation. But the banks seem to believe rates will stay low. At least one local bank is offering a guaranteed 3,75% rate for 15 years.
I believe the rates will stay relatively low since there’s little reason to expect the economy goes bullish here any time soon.

smau
October 11th, 2005 at 12:29 am (#)

The price bubble in aparment sell pricing in Helsinki (and other city areas) is real.
I expect a drop of even 25%.
This will hurt a lot of people.
My motto: buy a house/apt to live in, not to invest in. And make sure that you can make the payments, even if interests play bingo on your fortunes.
That way you won’t feel so burned, whatever happens.
On a related note.
I have several well-to-do acquintances who are selling their house and moving to rental. Not because they see it as dead money, but because they see the bursting of the bubble inevitable.
Nobody believed Greenspan when he warned about the stock bubble in late 2000. Look what he said in July 2005 about housing prices:
http://money.cnn.com/2005/07/20/news/economy/fed_greenspan/
Now you could ask what this has to do with prices of apartments in Helsinki area? Interconnectedness of investments and minds…

api
October 20th, 2005 at 8:37 am (#)

Here’s a pretty good summary of the current market situation:
http://www.hypo.fi/asuntomarkkinatilanne_q32005_
I like Hypo a lot better than banks. I got my own mortgage from them and got very professional and courteous service.
The gap between high-end areas and the rest of the market is growing constantly even within Helsinki. If you want to make a good investment and buy an apartment for living there yourself, I would pay very close attention to A) location and B) housing corporation in that order.
One interesting thing to note about premium price apartments in Helsinki center is that they are often in old buildings and have considerably more cubic meters per euro than the new apartments with lower ceilings.

My
October 23rd, 2005 at 5:59 am (#)

Oh stab me where it hurts, I also want to go apartment hunting *sniff, sniff* :) I like your blog!

california
May 16th, 2006 at 4:58 am (#)

What are the prices for apartment rent in Finland? Any source in english?
Thanks in advance
Tom Keane

Jyri
May 16th, 2006 at 6:20 am (#)

Leave a Comment