Survey Reveals Optimism Among Real Estate Investors in Finland
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Loading... - Aziza Hamdy
- 17 Oct 2024
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A recent survey conducted by the Finnish Landlord Association has highlighted a growing sense of optimism among real estate investors in Finland. The survey indicates that investors are finding it slightly easier to operate in 12 cities and are experiencing improved tenant-finding conditions in nearly all of the 29 cities surveyed. Eemeli Karlsson, an economist at the Landlord Association, emphasized that this development is particularly encouraging given the challenges faced in recent years, including rising property maintenance costs, stagnant or declining rents, and increased payment difficulties among tenants.
Karlsson noted that the ability to find tenants has been exceptionally challenging for landlords, making the news of improved conditions significant. The survey, which garnered responses from over 2,200 investors, revealed that while the current interest rate environment is perceived as a diminishing risk, over a quarter of respondents indicated that interest rates have complicated their operations in the past six months. Interestingly, only 14 percent felt that the recent drop in interest rates provided any relief, while nearly 60 percent reported that interest rates or their fluctuations had no impact on their investment activities.
Despite the optimism, the survey found that 61 percent of respondents still view soaring maintenance costs as a significant risk. Karlsson pointed out that while many risks have diminished, the overall perception is that risks in real estate investment have decreased, suggesting that the most challenging times may be behind them. However, concerns about potential tax increases and heightened regulation have grown among investors.
The survey also revealed that slightly over a quarter of respondents plan to enter the investment property market within the next year, with mid-sized cities identified as particularly attractive for investment. In contrast, Helsinki and Vantaa were viewed as the least appealing locations. Karlsson explained that purchase plans reflect the perceived rentability of properties; if investors find it difficult to secure tenants, the risk associated with purchasing investment properties increases. Vantaa, in particular, is experiencing an oversupply of rental properties, while mid-sized cities offer better tenant-finding prospects.
Additionally, the proportion of investors planning to sell parts of their portfolio has risen to 23 percent, with notable selling intentions reported in Lappeenranta, Joensuu, and Lahti. Overall, the survey results suggest that the rental market is gradually stabilizing, although ongoing market changes, such as the threat of unemployment, benefit cuts, and stricter regulations and taxation, continue to keep landlords vigilant. Karlsson summarized the findings by stating that while there is a sense of stabilization, the landscape remains dynamic and requires careful attention from investors.
