An increasing portion of Finnish incomes is going towards housing costs, according to a comparison of income and real estate price data. By comparing wages to housing costs, Yle found that house prices are rising faster than wages, and that in each of the last four years net annual income has been enough to buy an ever smaller amount of living space.
The comparison calculates annual income for each income group, then works out the average cost of a square metre of living space in five different regions of the country, and then works out how much property a person could buy if they spent their whole income in any given year on a home.
That is obviously not how people generally purchase their houses, but it does give a good indication of their purchasing power as viewed by housing loan providers.
The comparison showed large differences between income groups, but also illustrated a trend that has seen everyone’s purchasing power decline—even the higher-income groups. This graphic shows how the bottom, middle and top ten percent of income earners have fared relative to housing costs.
In the capital city region, the very poorest ten percent make enough money in one year to buy just 3 square metres of living space. In northern and eastern Finland that the income of those in that bottom decile is equal to the cost of eight square metres, but even there purchasing power has weakened as housing costs have risen quicker than incomes.
Middle income earners in the Helsinki region now only make enough to buy less than ten metres of living space, while in the north they can buy more than 20 square metres.
The biggest income groups were able to buy some 30 square metres of averagely-priced living space in the capital with one year’s income, or as much as 70 square metres in eastern Finland.