More than a hundred residential construction projects have not started in Helsinki this year. Due to the decline in construction, some services may remain unfulfilled.
Housing construction the slowdown can now be seen even in Helsinki’s developing and sought-after residential areas.
For example, in Kalasatama and Sompasaari, according to Helsinki’s building control, a total of ten sites for which the city has granted a building permit have not been built this year.
There are seven projects on hold in Pasila. There are a total of fifty projects in Kruunuvuorenranta and Jätkäsaari that have received building permits but have not been started.
The builders include several individual players, including large construction companies.
Building permit the recipient has three years to start construction and five years to complete the work.
According to the building control, there are therefore constantly hundreds of planned residential apartment buildings in the city, the construction of which has not started despite the permits obtained.
This year, a considerable number of residential construction projects have still not been started: more than a hundred in total. The number is significantly higher than, for example, in 2020, when five projects with permits were not built.
When one developer puts construction on hold, it can make other construction projects difficult.
There are such sites, for example, in Kruunuvuorenranta, which is part of Laajasalo, says Helsinki’s building control manager Leena Jaskanen.
According to Jaskanen, even those projects that are progressing have difficulties with complex joint arrangements, when solving the arrangements is left to the shoulders of one construction company.
With joint arrangements, housing associations usually agree on, for example, the costs of a shared yard, parking and waste management.
From here for this reason, the apartment building projects of Finland’s largest construction company YIT in Jätkäsaari, among others, have been delayed.
YIT’s director responsible for apartments in the capital region Harri Isoviita says that the start of the object called Helsingin Samla in Gibraltar square is dependent on the projects of other implementers.
When the start of one object is delayed, a chain reaction occurs.
“Entire blocks are zoned as a single entity, in which case the entire area must be planned beforehand [rakentamisen] getting started. In this case, the houses are linked to the parking garage both in terms of construction and ownership.”
According to Isoviida, this has also affected the Helsingin Föli destination, which has been planned for the same block on the Länsisatamankatu side.
The delay in construction also hurts residents who have already moved to new residential areas.
Building control manager Jaskanen says that construction and the incompleteness of residential areas play a big role in comfort and attractiveness.
According to Jaskanen, there is also a danger that all planned services may not be implemented if apartments are not built.
Construction company Skanska has two projects in Laajasalo and Pasila each, which it has not started according to the building inspection. The company’s regional director Juhani Aspara justifies this in his email reply with the difficult market situation.
“The permit is often applied for well in advance, so that construction can be started as soon as the market situation allows it.”
According to Aspara, construction usually only starts when the site has, in addition to a building permit, sufficient advance reservations.
Skanska currently has only one object in pre-marketing in the capital region, an apartment complex of about 60 apartments in Kruunuvuorenranta. According to Aspara, its pre-booking rate is not yet sufficient to decide on the start of construction.
“The market situation has been challenging since last fall, which is why we haven’t brought new items to advance marketing in the same way as in recent years.”
Helsinki housing production, or Att, has two apartment buildings in the Kalasatama area that have not been started. Att is responsible, among other things, for the construction of right-of-occupancy and rental apartments in Helsinki.
Head of Unit Merja Rukko Attsta says that the purpose is to start all projects for which it receives funding from the Housing Finance and Development Center (Ara).
Ara finances affordable housing production by granting state-subsidized, cheaper than usual loans to developers. Without this funding, affordable housing production cannot begin.
“Last year, we had several projects whose price level rose so high that Ara rejected the contract offers we received. When we have developed and tendered the projects again, the prices have come down somewhat.”
Att is still waiting for a financing decision for one of Kalasatama’s rental housing properties.
Challenging due to the market situation, housing sales are currently slow. A record number of new apartments have been completed in the capital region in recent years, but now apartment investors have left the market.
This can be seen not only in the decline of construction but also in the almost empty apartment buildings. For example, the apartment building built by YIT in Töölö has more than fifty apartments, of which less than ten have been sold by mid-August. The company made a very weak result at the beginning of the year.
YIT is not the only one. During the beginning of the year, hundreds of construction companies have filed for bankruptcy, and some are reorganizing their operations.
If the situation continues to be similar for a long time, according to the public estimates of experts, there may be forced sales of plots reserved for construction and ready-made apartments at reduced prices.
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