Finnish economy sees strong growth during October as property prices rise

The cities of Helsinki and Tampere have seen the highest increase in property prices this year.

Home sales have picked up following a slump in 2020 Image: Henrietta Hassinen / Yle

Finland's GDP saw a 4.2 percent growth during July–September compared to the same period last year, according to the latest data from Statistics Finland.

GDP volume increased by 0.8 percent over the previous quarter. Foreign trade was especially strong, with exports growing by 9.4 percent in July–September compared to the same period last year.

Private consumption also drove economic growth, with a 1.3 percent increase from the previous quarter and a 3.1 percent increase over the past year.

However, investments fell by 3.1 percent from the previous quarter and by 0.3 per cent in the last twelve months.

According to recently revised data, Finland's GDP grew by 8.2 percent between April and June compared to the same quarter last year.

Property prices rose 3.6%

Statistics Finland also found that the prices of old dwellings in housing companies saw a 3.6 percent increase this October compared to the previous year.

Old dwellings refer to properties that have been completed at least two years before the statistical reference year.

October saw a 1.1 percent increase in property prices across Finland compared to September. Prices increased in all major cities and regions except for Eastern Finland and smaller municipalities in the Helsinki metropolitan area.

Helsinki and Tampere recorded the highest jump in prices since last year. The cost of real estate increased by 6.9 percent in Helsinki and 4.9 percent in Tampere this October compared to the same time last year.

Espoo, Kauniainen, Turku and Oulu also saw a price rise of more than four percent this year.

Meanwhile, since 2015, property prices have risen by more than 28 percent in Helsinki and by nearly 19 percent in Tampere.

The cost of homes went up the most in southern and northern Finland—an increase of 4.2 percent each since last year.

In contrast, prices declined by 1.9 percent in Eastern Finland and 0.9 percent in satellite towns or smaller municipalities in the Helsinki metropolitan area.

While property prices have remained nearly unchanged in northern and western Finland since 2015, they increased by almost one-sixth in southern Finland. In Eastern Finland, on the other hand, prices have fallen by one-fifth.

Property sales increased

Preliminary data from Statistics Finland indicate that property sales have picked up following a slump in the housing market caused by the Covid-19 shutdown in spring 2020.

Property purchases across the country grew by nearly 45 percent in the second quarter of this year compared to the same period last year.

Sales in key cities, including Helsinki, Espoo, Tampere, Vantaa, Oulu and Turku, rose by 41 percent in the second quarter of 2021, while smaller towns and municipalities saw a 49 percent increase.

The value of property sales during the first half of this year amounted to 10.5 billion euros, a 39 percent increase over the past year.

Additionally, the total value of home sales saw a 60 percent growth in the second quarter of 2021 compared to the previous year.