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Property prices rise despite coronavirus crisis

In previous economic crises, house prices have tended to decline in line with the rest of the economy.

A preference for detached and terraced houses could be evidence of consumers changing their behaviour, PTT said. Image: Tiina Jutila / Yle

Finland's housing market was relatively unshaken by the coronavirus pandemic last year, with prices of share-ownership properties rising nationally, says a report by Pellervo Economic Research (PTT).

PTT attributes the rise to a combination of light-touch monetary policy and changing buyer habits.

Prices did not rise equally across the country, however, with the difference between major cities and other regions becoming increasingly polarised.

Data from Statistics Finland shows that the average price of a flat in an older building rose by 2.1 percent nationwide. The price rise in Helsinki was almost five percent, with prices in Turku and Tampere rising around four percent. Similar flats in Oulu and Vantaa, however, saw no increase in price.

Regional price differences grow

There have been some signs of a change in consumer behaviour due to the coronavirus pandemic, according to PTT economist Peetu Keskinen.

"There has been more demand for terraced and detached houses than before, with Kuopio and Kotka standing out among other cities. The property market there has been particularly strong," Keskinen said.

Property prices in Kuopio and Kotka rose four percent faster than normal last year, according to PTT.

By contrast, prices in Lahti, Kouvola, Mikkeli, Kokkola and Jyväskylä rose more slowly than usual. Property prices in Lahti rose almost six percent less than usual, the report said.