KVKL: FINNISH USED DWELLING SALES BETTER THAN EXPECTED IN 2011

Fears of low sales were not realized in the 2011 real estate market in Finland. Although consumer economic confidence was under trial particularly as the year wound down, sales of used dwellings in Finland were surprisingly brisk even then. The Central Federation of Real Estate Agencies (KVKL), Finland’s advocacy organization for the real estate brokerage industry, estimates that the total number of real estate agent-facilitated used dwelling sales in 2011 is likely to reach last year's level.

The number of dwellings brokered by Finnish real estate agents in 2011 is expected to rise to almost the exact same level seen in 2010, one of the most busy real estate transaction years of the new millennium. Jukka Malila, Managing Director and CEO of KVKL, commented from the country's capital of Helsinki at the turn of the year: “In practice, this means that real estate brokers will have facilitated the sale of approximately 66,000 old apartments, terraced houses and detached homes in 2011 - about the same amount as in 2010”.

Housing prices reached their peak before the summer of 2011, after which a slight depreciation was observed. However, no real estate market slumps of any kind took place in Finland.

“The situation in Finland can be considered quite satisfactory.  At the moment, people’s interest in real estate is especially focused on reasonably-priced housing – the general climate of wariness currently pervading the market discourages pursuance of grander visions. Financial instability in the euro zone will no doubt contribute to Finnish real estate market uncertainty as we move into the future as well,” explains Malila, who also serves as Secretary General of the Nordic Real Estate Union NEU.

Over the latter half of the previous decade, only the very strong year of 2007 saw more real estate transactions involving old properties than what was seen this year. The weakest year in the late 2000s was 2008, when the financial crisis set in and a weak end-of-year meant the number of sales for used apartments, terraced and detached homes remained at approximately 58,000.

In terms of the number of sales transactions, the years rarely repeat themselves, and yet a relation between 2010 and 2011 can be seen in the manner in which sales continued through the years consistently with no monthly drops. Even in years with good sales figures, it was typical in the 2000s for real estate trade to experience monthly respites in activity, when the number of sales would periodically fall without warning.

In Finland as with the rest of the world, the real estate market is most dormant during the summer and the Christmas and New Year holidays. For this reason, the number of completed sales transactions typically falls in December anywhere from 20 to 40% on previous months.

For a long time now, low interest rates have acted as the primus motor for real estate trade in Finland.

Dependent on the year, real estate agents broker the sales of roughly 75-80% of all old housing in Finland.  The percentage of new housing sold via real estate agents in Finland in clearly smaller.

Helsinki, 30 November 2011

Further information:
Jukka Malila, Managing Director and CEO
Central Federation of Real Estate Agencies (KVKL)
tel. +358-(0)50-5112100