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No buyers for homes in Finland's remote areas

The value of property outside of Finland's built-up areas continues to plummet, as urbanization and dwindling education and employment prospects take their toll.

Anja Soininen talonsa pihalla.
Anja Soininen is asking 68,000 euros for her home in eastern Finland. Image: Heikki Haapalainen / Yle

Anja Soininen would like to sell her home and move closer to her son's family, but there are no interested buyers for her property in Polvijärvi, eastern Finland. Her three-room house with a sauna and "nice neighbours" has been on the market since May.

"If only I could sell it by the autumn; I hope that someone would show an interest," she says.

She might have to wait longer, however, as it is not uncommon for dwellings outside Finland's growth areas to sit unsold for several years nowadays.

"People hoping to move away from the countryside are increasingly thwarted by the lack of prospective buyers for their home. It is a growing problem in Finland," says independent researcher Timo Aro.

One million homes "in the wrong places"

Property values are following two trajectories in Finland: Prices continue to climb in the capital region, while in remote areas they have remained stagnant or even fallen. Countryside locations that are far away from basic services and municipalities with failed industries in their past have been the hardest hit by the trend.

Sami Pakarinen, chief economist for the Confederation of Finnish Construction Industries, told the financial paper Kauppalehti in 2016 that one million of Finland's housing units are "in the wrong place".

"For the last 25 years, we've been building a lot of housing in the wrong places, when you think about future needs. If we've got three million units, then a rough estimate would say that one million of them are in the wrong places," he said in the story.

In a January blog post, the rental property agency Vuokraturva suggested the introduction of a state-funded demolition compensation programme to encourage the work mobility of people who are trapped in unsold properties.

On the other hand, a survey recently commissioned by Yle found that the clear majority of Finns are worried about the countryside growing vacant if the urbanization exodus continues. Nearly four out of the five people polled agreed that the government should guarantee services in sparsely-populated areas in order to keep them populated.

"Housing is not a good long-term investment"

Markku Tykkyläinen is a professor of economic geography at the University of Eastern Finland. He says that the growing price gap is a normal structural change that takes place as the availability of workplaces ebb and flow in different urban areas. New housing is naturally built where people are or where they are expected to be.

He says problems arise when people's only capital is the home they live in. Unfortunately, a person's dwelling is not the best long-term investment, he says, even if the homeowner would wish that it were so.

"Homes that were built after the Second World War or even as late as the 1970s might simply be at the end of their service life. New construction is always targeted in areas with good sales prospects and are projected to have people settling there," Tykkyläinen says.

The professor says that urbanisation is 30 years ahead of Finland in Sweden, where the countryside residents that are left have stayed because they have jobs nearby. He says that the elderly, unemployed and the people unable to work have long since transferred to urban areas in Finland's western neighbour and live evenly spread among the working populations there.

"The younger generation isn't necessarily interested in maintaining older houses that need a lot of repairs. The situation has now grown acute: houses in small communities are being put up for sale, but there are no young people interested in buying them," he says of the situation in Finland.

Holding out for a decent price

One reason the sale of older homes has dragged on for years in some instances is because the sellers have refused to lower their prices.

Anja Soininen hopes to get 68,000 euros for her small home in Polvijärvi, and she says that for the time being, she has no intention of backing down on the price.

"This house has had all kinds of renovation done: a new kitchen and plumbing, a new oven was installed and the exterior was painted last summer. There have been so many expenses that I want to get my asking price," she explains.

But even if she were to end up dropping her price, it may not help attract a buyer.

The Joensuu-based Karjalainen newspaper recently carried a story of an apartment owner in Outokumpu, eastern Finland who dropped the price of her 90-square-metre flat from the original asking price of 80,000 euros to 33,000 euros – and the flat still hasn't sold.

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