Shortage of land pushes housing costs to among highest in Europe
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Housing in Finland is expensive by European standards. Only Luxembourg, Sweden, and Denmark bypassed Finland in a Eurostat comparison of money spent on housing in 2003.
In recent years, the rising trend in the price of houses and apartments has shifted from Southern Europe to the north, says the Royal Institution of Chartered Surveyors (RICS) in its latest survey of the housing market.
In Belgium, for instance, which has twice as many inhabitants as in Finland, although the whole country is smaller than the Province of South Finland, people live in cheaper and more spacious accommodation than in Finland.
A major difference between the two countries is that in Belgium, the migration trend is away from the Brussels region. In Finland, the population is increasingly gravitating toward the Helsinki region and other urban growth centres.
With demand outstripping supply, prices in the Helsinki region are getting to be beyond the reach of many who would like live in the area.
"We are getting near the point where ordinary wage-earners can no longer afford to live in the Helsinki region", says Anja Mäkeläinen, managing director of the building and housing construction foundation Asuntosäätio.
The high costs are getting to be an impediment for middle-income service sector professionals, such as nurses and bus drivers, to live in the Helsinki region. Aki Kangasharju, research professor at the Government Institute for Economic Research (VATT) notes that those with very low incomes can benefit from housing subsidies which are not available to those who are slightly better off.
Pekka Pajakkala, head of research at the Technical Research Centre of Finland (VTT), sees a shortage of available land, and problems with zoning, as the main reasons for the high cost of housing in Finland.
"Price trends of land parcels should be brought under control", Pajakkala emphasises.
There has been massive demand for housing in growth areas in Finland. However, the market situation alone cannot explain the mounting costs.
Experts say that political vision and tax reform are needed to bring prices under control.
"An overall political vision is needed to make prices more reasonable. Now we should give much thought to the urban structure", says Seppo Teerimo, a researcher at VTT.
"Are metropolitan areas based on long commutes what we want? Do we want people to commute from Riihimäki to low-paying jobs in Helsinki because they cannot afford to live any closer?" Teerimo asks.
Martti Lujanen, a top official at the Ministry of the Environment, says that the problems in the housing market are in zoning, taxation, and structures, including municipal borders that cut through growth areas.
"For some reason out society tolerates a situation in which borders between municipalities block sensible regional planning. Empty plots are no cause for great concern here", Lujanen says.
The price of land has gone up even more in recent years than that of construction or of houses or apartments.
Lujanen says that a "myth" prevails in Finland that the present prices follow the laws of the market economy.
"Some taxes are beneficial and some are detrimental. For instance, in the United States, they understood long ago that unbuilt plots of land fit for construction should be taxed."
Helsingin Sanomat
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| 23.1.2007 - TODAY |
 Shortage of land pushes housing costs to among highest in Europe
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