interim report Q1/2014
The global economy has taken a turn for the better, suggesting that in due course green shoots will also emerge in the domestic economy.
However, the growth outlook for Finland's national economy remains challenging, and GDP is expected to grow by only 0.5 per cent in 2014. There will be no increase in private consumption, investment will fall, and unemployment is rising. Uncertainty in the economy persists, and interest rate levels can be expected to remain low throughout 2014.
Demand for rental apartments has remained at a good level. A slow planning process and persistently high contractor prices, particularly in the Helsinki Metropolitan Area, are weakening conditions for the production of rental apartments.
Business is especially good for small rental apartments and newly constructed locations, particularly in growth centres. Meanwhile, demand has continued to fall slightly for apartments with higher rent levels in older properties. There is clear demand for new homes in the Helsinki Metropolitan Area.
There were no substantial changes in the financing market. New supply is focusing on privately financed rental apartments.
The Ministry of the Environment is preparing a legal reform that will improve the potential for state-subsidised production with, for example, a new 20-year interest subsidy model. The amended legislation may affect state-subsidised production.