Finns' housing affordability notably better
3.3.2009 09:30Housing affordability improved notably in Finland in the last quarter of 2008. The index value for the whole country stood at 40.9. In most of the cities included in the index, the index value was on the same level as in the last quarter of 2006. The worst index value was recorded for Helsinki (60.3) and the best for Kajaani (26.3).
Housing affordability improved the most in Helsinki and the least in Kuopio. The monthly cost of a household in Helsinki decreased from the previous quarter by 100 euros to 980 euros, whereas the monthly cost of a household in Kajaani decreased by 50 euros to 361 euros.
Housing prices fell slightly. The nationwide average home price is 144,000 euros, whereas in Helsinki it is 242,000 euros. The cheapest homes can be bought in Kajaani at an average price of 89,000 euros.
The decline in interest rates and housing prices enhanced housing affordability. In the first quarter of 2009, it is expected to continue to improve due to interest rates declining further and good income growth.
| Home price |
Monthly loan servicing cost |
Index Q3/08 |
Index 4/08 |
Change |
|
|---|---|---|---|---|---|
| Whole Finland | 144154 | 584 | 46,3 | 40,9 | -5,4 |
| Helsinki | 241766 | 980 | 68,4 | 60,3 | -8,1 |
| Espoo | 204902 | 831 | 54,9 | 47,9 | 2,0% |
| Vantaa | 165734 | 672 | 50,7 | 45,0 | -5,7 |
| Tampere | 151296 | 613 | 47,7 | 42,1 | -5,6 |
| Porvoo | 149376 | 606 | 48,1 | 40,9 | -7,2 |
| Kuopio | 131635 | 534 | 41,8 | 39,3 | -2,5 |
| Hämeenlinna | 129792 | 526 | 41,7 | 38,7 | -3,0 |
| Turku | 128486 | 521 | 42,6 | 37,9 | -4,7 |
| Joensuu | 122726 | 498 | 42,5 | 37,7 | -4,8 |
| Lappeenranta | 125338 | 508 | 40,8 | 37,3 | -3,5 |
| Jyväskylä | 126413 | 513 | 40,7 | 36,5 | -4,2 |
| Mikkeli | 112051 | 454 | 39,5 | 34,2 | -5,3 |
| Vaasa | 119578 | 485 | 37 | 34 | -3,0 |
| Lahti | 110669 | 449 | 37,5 | 33,4 | -4,1 |
| Oulu | 111821 | 453 | 36,7 | 31,3 | -5,4 |
| Rovaniemi | 100838 | 409 | 33,5 | 30,1 | -3,4 |
| Seinäjoki | 96768 | 392 | 35,7 | 29,3 | -6,4 |
| Kokkola | 95155 | 386 | 35,5 | 28,5 | -7,0 |
| Kotka | 98381 | 399 | 32,3 | 28,5 | -3,8 |
| Pori | 94003 | 381 | 31,5 | 27,8 | -3,7 |
| Kajaani | 89011 | 361 | 30,5 | 26,3 | -4,2 |
In this index housing loan costs are calculated for a 76.8 square metre dwelling, which, according to Statistics Finland, is the average size of a home in Finland. The loan taken out to purchase the home is 70 per cent of the purchase price and the loan period is 25 years.
The basis for the index is that loan costs, excluding tax deductions, should not exceed 25% of the household's gross income. If the index is 100, the household spends 25% of its gross income for loan servicing. The lower the figure, the better the household's ability to buy a home.
For further information:
Reijo Heiskanen, Economist, + 358 9 165 59942, +358 50 568 6623
Tarja Svartström, Private Economist, + 358 9 165 88186, +358 40 826 2006
