There has been a pent-up demand for small house apartments in the capital region.
The most popular the small house apartments in Espoo now have a queue of buyers.
These are isolated cases, but the demand for new small house apartments seems to have turned to growth in the capital region. At the end of the year, the upswing may accelerate if interest rates fall. This is what the experts say.
The change has been noticed, for example, in Olas Group. Founded in 2017, the company builds detached, semi-detached and terraced houses in the metropolitan area.
The company's CEO Markus Alitalo says that the number of contacts from customers has almost tripled in the beginning of the year compared to the end of last year. Trade volumes have also grown considerably compared to a year ago.
“It shows that the situation has changed and demand has clearly increased.”
I demand the increase has even been seen in queues, for example in Espoo's Nuottaniemi. There, the company is planning five separate houses of more than 130 square meters.
According to Alitalo, the list of interested people accumulated almost 150 names in a few weeks, and at the best, six customers were queuing for one apartment.
Although the builder of small houses sees light on the horizon, for him the situation is not the same as in the wild years of the corona pandemic. At that time, trade was at a record high.
“You can't bang your braces and shout in the street here yet.”
A hundred Olas Group, which built the apartment, strives for cautious growth. The company has forty apartments under construction in Helsinki, Espoo and Kirkkonummi. Advance marketing also has several targets.
Recently, a semi-detached property was completed in Helsinki's Laajasalo. One out of four apartments is unsold. Five separate houses will be completed in Vartiokylä in the fall, one of which is also vacant.
More than half of the 25 apartment townhouses in Kirkkonummi have been sold.
The phenomenon identifies the CEO of the Finnish Real Estate Agency Tuomas Viljamaa. According to him, the demand is significantly stronger in townhouses and detached houses in the capital region than in smaller apartment buildings.
“Prices have not been flexible in these matters very much. In the capital region, I also don't think there are very many new areas dominated by small houses in the pipeline.”
The demand is partly explained by the low number of small houses due to bankruptcies in the construction industry, says Viljamaa.
“In practice, profitability has been under pressure even in good times, and company processes have not worked”, Viljamaa describes the reasons behind bankruptcies.
He thinks that some of the companies that went bankrupt were part of a larger group and were deliberately driven into bankruptcy as unprofitable.
Small houses there may be even a bigger pent-up demand among buyers. Apartments have not been bought when there have not been enough available.
“It is certainly true that at some point demand will grow rapidly, when the outlook for households brightens”, estimates a senior economist Veera Holappa Pellervo Taloustutkimus from PTT.
“If the supply has not kept up, it will start to show in the prices as well.”
Since last summer, the supply of large small house apartments has decreased by tens of percent in the capital region. This is what Alitalo has discovered from the network's sales announcement data.
Consumers are still cautious because the economic situation is still unstable. However, concerns about the future have hindered the sale of small-house apartments less than other types of apartments, says Holappa.
“The biggest hit has come to small apartment buildings, when investor demand has weakened.”
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