Owned housing is possible for fewer and fewer people, and it raises rents in almost all European countries, writes HS Vision producer Anu-Elina Lehti.
Let’s take care a room from Berlin / They’re cheap there / Unbelievably beautiful / And let’s go visit for example on the weekend and when there’s a holiday.
Samuli Putron the song lyrics from 2009 are moving when listened to retrospectively. There were cheap flights, a zero-interest loan and not much flight shame. Blind optimism before the pandemic, the war in Ukraine and inflation.
Now the room in Berlin is not very easy to get rid of anymore. After the rapid rise in interest rates, fewer and fewer Europeans can afford to own a home. Development has raised rents to a record level in London, Paris and Berlin as well.
in Germany The increase in rents is partially explained by last year’s biggest jump in the number of residents in 30 years. More than 1.1 million people have moved to the country, mainly to escape the war in Ukraine. Berlin’s population has already swelled to 3.8 million people. Despite this, the city’s new construction is falling far short of the target numbers, as construction costs have skyrocketed as a result of rising interest rates and inflation.
in Lisbon rents have risen at the fastest rate in the whole of Europe between January and June. Portugal has drifted into a full-scale housing crisis, which it has fueled the influx of foreign money into the country with golden visas because of. Airbnb rentals are booming, and for example Lisbon’s famous Alfama up to 60 percent of the apartments in the area are used by tourists. At the same time, the country’s administration is trying to fight against rising rents with new regulation. In practice, the fear of the statutory curbing of rent increases has caused some landlords to raise rents already in advance.
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However, in a couple of years the rental market in the capital region may already look different.
Estonia, which is plagued by inflation, is also suffering from a sharp rise in rents. According to Eurostat, the country’s rent level has tripled since 2010. The increase is the largest in Europe during that time period. One of the reasons is considered to be the technology boom, due to which many foreign experts in the field have moved to Tallinn. Another reason is that only 18 percent of Estonians live in rented accommodation. Since there are only a few rental apartments, prices react strongly to changes in business cycles.
IN Finland TOO rents have turned to a moderate rise. According to the Statistics Finland, rents for privately funded apartments rose by 0.5 percent in the capital region and by 1.8 percent in the rest of Finland from a year ago in April–June.
Those who live on rent can breathe a sigh of relief, because currently the supply of rental apartments exceeds the demand. For the past five years, new apartments have been built intensively in Finland. It has curbed the rise in rents and increased the supply of rental apartments, especially in the capital region.
The situation is difficult for landlords, because the increase in mortgage interest rates and fees has not been able to be fully passed on to tenants, who now have enough choice in apartments.
A couple however, in a year’s time, the capital region’s rental market may already look different. Housing construction is slowing down strongly due to inflation and weak economic prospects. At the same time, Uusimaa is growing faster than the rest of Finland. For example, in 2022, the population of Uusimaa will increase from the previous year by more than 18,000 inhabitants.
They bring their own shock to the rental market cuts planned by the government. Last year, Kela paid more than 2.2 billion euros in housing subsidies. During the next government term, the amount is planned to be reduced by 350 million euros.
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