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, regional population growth and household sizes.

According to the Finnish Ministry of Finance’s report Construction 2021–2022, the global economy and world trade have gradually strengthened since last summer. The distribution of COVID-19 vaccinations has begun, and a significant vaccination coverage will be achieved in developed countries within this year.

According to Handelsbanken’s Economic forecast, the lifting of restrictions and the acceleration of the vaccination rollout will likely boost economic growth this year. The growth is expected to be especially robust in third quarter. Unleashing of pent-up household demand and growth in export are the main drivers of economic growth. Inflation will accelerate in Finland this year, but slower than wage growth.  The unemployment rate will start to decline remarkably in 2022.

According to the Confederation of Finnish Construction Industries (RT) business survey, housing production will remain at a fairly high level historically thanks to both consumer and investor demand. According to the Finnish Ministry of Finance’s report Construction 2021–2022, the growth of residential start-ups this year is expected to be concentrated in the Helsinki and Turku regions. The number of build-to-sell residential start-ups is expected to grow faster than non-subsidised rental housing start-ups this year.

According to the Confederation of Finnish Construction Industries (RT) business survey, housing production is supported by large cities, low interest rates and the resumption of economic growth. Growth in costs accelerated substantially at the start of the year. Based on the rise in the global market prices of raw materials, the increase in costs is expected to accelerate this year.

According to Pellervo Economic Research (PTT), the polarisation of the housing market is clearly evident as apartment prices in growth centres continue to rise, while the development of prices has been weaker in certain medium-sized cities. The pandemic mitigated the rise in rents in 2020. The improved economic conditions are expected to lead to higher rents for non-subsidised housing in 2021. According to PTT, the demand for apartments will remain strong in growth centres.

According to the Finnish Ministry of Finance’s report Construction 2021–2022, urbanisation slowed down in 2020 due to COVID-19 restrictions and the resulting increase in remote work, remote studying and remote meetings. According to the Confederation of Finnish Construction Industries (RT) business survey, urbanisation is nevertheless continuing in spite of slowing down last year.

According to KTI Property Information, the rental apartment market has been characterised by the growing share of small apartments in the supply, which has been supported by the decreasing average size of households as well as demand being concentrated in key locations.

Households living in rental homes outnumber those living in owner-occupied housing in Helsinki, Tampere and Turku. The share of rental household-dwelling units has also increased in all of Finland’s major urban areas. 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.

Trends


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 maintain 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 12 May 2021