A seaside block of flats on eastern Helsinki’s Kruunuvuorenranta was completed a year ago – but more than half of the Maininki building in Laajasalo stands empty.
Of the 78 apartments in the Skanska-built structure, 44 remain unsold. That’s a sign of the doldrums of the Finnish housing market.
"The economic situation and general uncertainty have meant that everything is happening at a slower pace," explains Marja Kuosma, Sales and Marketing Director at Skanska Homes.
For construction companies, apartments waiting for buyers represent tied-up capital while generating expenses.
Their inventory of ready-to-move-in apartments has shrunk over the past year, but many are still left ‘on the shelf’.
A year ago, there were around 4,000 unsold new apartments. That declined to about 3,500 by early August, according to industry reports.
Now, approximately 2,500 new apartments awaiting buyers, says Jouni Vihmo, Chief Economist at the Confederation of Finnish Construction Industries (CFCI).
"It's a slow pace," he says.
Record-low number of housing starts this year
According to property owners group Rakli, the number of housing starts this year will remain low at around 15,000-17,000 homes.
Some economists have predicted that the figure could be the lowest in statistics dating back to the 1960s – including the severe recession of the mid-90s.
"By many measures, the housing construction recession in this economic cycle has been worse than during the recession of the ‘90s. And we don't have anything very positive to say about this or next year," says Vihmo.
So how can construction companies sell new apartments in a situation where prices in older nearby buildings are falling, and the cost gap between new and old flats is growing?
For example, prices for apartments in the Maininki building range from over 300,000 euros for a tiny 29-square-metre studio to over 1.5 million euros for a 139-square-metre apartment.
According to Kuosma, the answer is that there may be room for haggling.
