Insufficient Supply; Growing Demand; Higher Rents

Rents in Finland continue to rise at rapid rates. Between July and September rents increased across the country on average by four percent compared to the same period last year. Over the last few years, home rental rates had increased by just 3 percent. The downward economic spiral has however made rental a more attractive option than home ownership for many. According to data from Statistics Finland the cost of living in non-subsidized or privately-owned rental homes crept up by three percent, while rents for state-funded Arava homes increased even more. Rents in the capital city area inched up faster than in other parts of the country - on average by nearly four percent more than last year. Rents for privately-owned homes in the capital city area jumped by up to five percent, compared to only a couple of percentage points in the rest of the country. Demand Pushing Up Rents

A growing number of people are opting for rental homes, and nowadays twice as many rentals are going to families as one year ago.

This rising demand is behind the steep increase in the cost of renting privately-owned homes. Additionally competition for rental homes is stiff, since there aren't enough homes for all prospective tenants. However no rent has risen as fast as the rents fetched by smaller apartments.

One solution to the shortage of rentals is for home owners to put second homes on the market for rent. The suggestion comes from Timo Metsola, Chairman of the Board of the realtor Vuokraturva.

"Several hundred homes have come onto the rental market and I would assume that in the next year that number will reach the thousands," he added.

The large number of new homes languishing unsold as a result of the current economic uncertainty could also be added to the rental pool to relieve the distress of would-be tenants as well as those despairing of ever getting newly-built properties sold.

Another option could be to build affordable homes in the shells of empty or abandoned office buildings of factories. There are currently about 100 such buildings in Helsinki. Its believed that exploring these options could open the doors to about 3,000 new rental homes.