The cost of accommodation is expected to consume an even greater proportion of Finnish incomes, according to a new report by the Finnish House Owners’ Association and the Finnish Real Estate Federation. The study shows housing costs will rise on average 3.6 percent annually until the year 2018.
This means that home owners will see a 1.9 percentage point increase in accommodation costs relative to their disposable income. The study showed that factors such as higher taxes and rising energy costs will push up expenses for home owners. Other costs include heating, water and waste water treatment, garbage disposal and insurance.
The forecast predicts that the cost of rental accommodation will rise more moderately than owner-occupied homes -- some 3.1 percent compared to 3.8 percent. Housing costs for families with children are projected to rise 3.6 per cent every year, while households occupied by debt-free retirees will face an annual 3.8-percent increase in accommodation expenses.
Housing costs highest in capital region
According to the report, residents of the capital region face significantly higher housing expenses that people living in other parts of the country – up to 1,000 euros more each month. Costs for owner-occupied homes were lowest in Kouvola in southeastern Finland and Rovaniemi in the north, while rental expenses were lowest in Kouvola and Rauma in the southwest. The factors influencing the difference between living costs in the capital and other areas included the size of loan installments and interest rates – in Helsinki such costs are 3.5 times more than in Kouvola.
Property taxes also play a role in the differences in housing costs in different parts of the country. The Finnish Real Estate Federation estimated that owners of a 60 square-metre flat paid the highest property taxes in Helsinki – about 480 euros per year. In Rauma by contrast the property tax on a similar home would be just 130 euros annually. Property taxes for a detached home in Helsinki meanwhile come in at 1,160 euros every year, compared to the national average of about 480 euros.
The research was conducted by the Pellervo Economic Research Institute PTT, who reviewed housing costs in sample homes the country’s 21 largest cities. The latest study is the fourth conducted this year.