Operating environment and trends

As we operate in the residential real estate sector, the company is affected particularly by the situation in the residential property market and development in Finnish growth centres. The company is also affected by macroeconomic factors, such as economic growth, employment, disposable income, inflation and population growth.

According to the Ministry of Finance’s forecast, the situation in the world economy remains uncertain in spite of some signs of stabilisation. Domestic demand will maintain growth in the coming years, as the outlook for foreign trade is relatively weak. The growth of private consumption will continue at a steady rate. The growth of disposable household income will be supported by higher income levels and continued high employment. Inflation will remain moderate. Private investments are predicted to decline next year. Investments in residential properties will decrease in particular. However, the decline in residential property investments is predicted to level off in 2022, which supports GDP growth. (Source: Ministry of Finance, Economic survey 12/2019)

According to the Confederation of Finnish Construction Industries (RT) business survey, the number of new residential projects is declining from record-high levels towards more normal production volumes in 2019 and 2020. Building permits granted for new apartments declined substantially during 2019. The majority of the drop in the volume of residential construction will take place in the latter half of 2020.

As the rate of economic growth declines, new construction will focus increasingly on the largest urban areas. In spite of slower economic growth, the continued trend of urbanisation will maintain the need for new apartments. According to the survey published by the Confederation of Finnish Construction Industries, the level of residential production will be sufficient in Finland’s growth regions in 2019 and 2020, but there are concerns regarding the adequacy of supply thereafter.

According to a forecast by Pellervo Economic Research (PTT), the polarisation of trends in apartment prices is becoming even more pronounced than before. In spite of economic growth, activity in the housing market has only picked up in the most significant growth centres, whereas apartment prices have continued to fall in smaller cities.

Demand is growing in housing markets in growth centres: new apartments are being built at a high rate, the density of cities is increasing and apartment prices are rising. At the same time, problems are worsening in the housing markets in areas that are on the decline. In the capital region, residential construction activity has remained at a high level, which is keeping the housing market’s focus of growth on new production. The regional differences in the housing market are also evident in the rental market. In spite of strong growth in supply, migration in particular is maintaining high demand for rental apartments. Demand is continuing to grow especially for apartments with good transport connections. Private investors, domestic housing funds and institutional investors are expected to maintain their position in the rental housing market. International residential real estate investors also continue to have a strong presence in the Finnish market.

Effects of urbanisation

According to Pellervo Economic Research (PTT), the trend of urbanisation has continued in Finland even stronger than expected, and rapid urbanisation is currently the most significant driving force behind the development of the housing market. People in cities want to live in city centres even if their job is located outside the city centre. The significance of location and services is becoming increasingly highlighted in people’s housing needs. Commuting from cities to rural areas for work is growing substantially.

Households living in rental homes outnumber those living in owner-occupied housing in Helsinki. The use of rental housing will also grow to exceed the use of owner-occupied housing in Tampere and Turku in the near future. This is a strong sign of the acceleration of urbanisation on the one hand and the change in housing preferences on the other hand. For younger generations, owning a home is not as significant as it was for previous generations. Owning a home is also no longer seen as the only way to accumulate wealth. Instead, people are increasingly attracted by the freedom provided by rental housing. This will support the development of the rental housing market for a long time to come.


Kojamo responds to the trends of urbanisation, digitalisation and communality in accordance with its strategy, providing its customers with apartments with good locations and services that make daily life easier, increase the attractiveness of housing and improve the sense of community. Our aim is to develop a networked service platform that will enable agile innovation implementation in cooperation with other operators. Kojamo’s properties serve as a platform to which the new services can easily be connected.

Page updated 13 February 2020