Helsinki Porvoo Lake Saimaa Also in Finland the Housing was a crucial question after the II WW From Carelia moved about 4 refugees almost 5 soldiers started a new life after 5 years wartime in Lapland main part of the housing stock was destroyed during the War of Lapland On the other side the damages in main cities were not comparable to many other countries The shortage of houses was extremely high 1
HOUSING PRODUCTION IN FINLAND State housing loan Interest subsidy loans Non-subsidized (farm houses) Non-subsidized BUILDING PERMITS AND HOUSING STARTS (SUM OF 12 MONTHS) 8 7 6 5 4 3 2 1 DWELLING S 4 BUILDING 35 PERMITS 3 HOUSING STARTS 25 FREE MARKET 2 PRODUCTION 15 1 STATE 5 SUPPORTED PRODUCTION I/93 I/94 I/95 I/96 I/97 I/98 I/99 I/ I/1 I/2 I/3 I/4 25 REAL PRICE INDEX OF DWELLINGS (197 = 1) 2 HOW LARGE A LOAN CAN BE SERVICED WITH 5 EUROS PER MONTH? (increases in wages included annually) 2 FINLAND HELSINKI METROPOLITAN AREA 18 16 14 15 12 Euros 1 1 8 6 5 4 2 19 72 19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 8 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 9 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 2 2 1 2 2 2 3 2 4 2 5 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 *) Loan term increases from 15 years in 199-95, -96: 16 years., - 97: 17years. 23: 25 years SQM HOW MANY SQM CAN ONE BUY WITH 5 /MONTH (increase in wages included) WITH FIXED LOAN TERM (18 YEARS) Share of rental dwellings of all occupied dwellings around year 2 14 12 REST OF FINLAND 7 6 5 1 8 6 Percetage 4 3 2 1 4 2 HELSINKI METROPOLITAN AREA Spain Iceland Ireland Italy Greece Norway Great Britain Belgium Finland Luxembourg Portugal Sweden France Austria Denmark Netherlands Germany 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 2
Share of social rental dwellings of all occupied dwellings around year 2 4 35 3 2, 1,8 1,6 HOUSING SUBSIDIES OF GDP Percentage 25 2 15 1 1,4 1,2 1,,8,6 Production subsidies Mortgage interest deduction Housing allowance 5,4,2 Spain Luxembourg Switzerland Portugal Iceland Italy Norway Belgium Ireland Germany Finland France Denmark Great Britain Sweden Austria Netherlands, 198 1985 199 1995 1996 1997 1998 1999 2 21 22 23 24 " & '( ) Social rental houses 386 955 Rental housing stock 826 253 Not for profit organizations 1 Housing stock 2 666 6 Private owned rental stock 439 298 Municipals 3 Private ownership 1 866 6 " & '&() & *++ ',,., -, *+,*+- *.-/+, *./12 *.2/33 4,,./2,2-,1,++. 322--,1..+,*-.,33-1 *.-2+2 5 6.-1133.*-,/3.,-*1+.-2-3* " " Kunta-Asunnot 9.5 HOAS Yhteensä 214.6 asuntoa /' +1 /' *- - 3
The money markets have been light globally a long time 7 6 Yhdysvaltain fed funds -target inter. Ison-Britannian repokorko EKP:n perusrahoitusoperaatioiden minimitarjouskorko Japan over night 7 8 5 4 3 2 1 21 22 23 24 25 26 27 Lähde: Reuters. The rise-up of interest rate has affected to credit development Euroarea Finland Prosenttimuutos edellisestä vuodesta 2 15 1 5 19 :; ; < ; ; ; -2 ; ;; 21 22 23 24 25 26 27 Lähteet: Euroopan keskuspankki ja Suomen Pankki. = ; ; ; " " - -, -11 --, -*, -,, -3, -2, > *9? : @ A A @ 'B9( ) 66 )6 1C 4
Lowering the total costs of housing loans The growth of competition in money-markets; Economic of scale in banking The growth of products in housing loan market Getting new groups in housing credit market immigration; Spain The subprime mortages in credit market The well functioning money market helps the handling of these risks dividing the risk Better opportunities to decentralize of credit risk Geographical decentralization; The benefits of capital markets > D > 1/,/>E 1/22D 1// >E @ 1//*>F ; ; @ ; 32 + 1/.@ ; < D; 5
>E G ; < ' ;@ "" < " 2)- + 3 -+ 4) " )" " 5 "( ) EEG @ @ 19 Finland will require the annual construction of about 3, homes until 215 (VTT) New construction is mainly freehold flats and one-family houses (the overall market in construction of freehold flats remains static) Moderate interest rate development is likely to maintain demand for freehold flats; however, demand and price development are stabilizing Finnish urbanization continues (1 million people migrating to urban centre), at a rate greater than in the 196's and 197's - growth areas need both new freehold and rented flats Construction is concentrated in growth areas and their environment. A proportion of rented apartments is also provided for these areas (there is no market growth nationally, however) International investor interest in the Finnish property market is increasing, and property funds are giving rise to new actors The Finnish housing career starts earlier and lasts longer than before (2 year-olds leaving home in 1995 4 and in 23 51) Relative drop in income level for occupiers of rented flats (as a percentage of freeholders' income in 199 62 and in 23 53) increase in disturbances and evictions Housing needs increasingly diverse and duration of rented occupancy increasingly short Growth in the market for senior flats Increase in standards, because alternatives exist Repair needs and costs continue to grow resources required for upgrading (Challenge: How to maintain the attractiveness of 197's suburban housing?) 6
EE -9 86((" "7 " - " 8 EE ; A ; A; 9 AEE 9 *9 ) ",A '33A( :'( '1,A( '*.A( 5@: '-*A( 9 ( " &7 8,A : ;- "-" EE H @ Product (right quality) (Official guidelines in this area have taken care that there are no real quality variations) Customer relations (We produce the best customer value) Price (right price) (Municipal rented housing organisations hold an advantage with their more efficient ownership and cost structures.) EE I ) & 6 ) (7+ =EE ; ; & 6 -< )- = @; & 6- (( + = ; ; & 6(+ (+ (( + ""- (- = & 6 + " - = @ 7
,9 ' "- 7 " : ; ' "- :- ( -< (( + VVO property investment is long-term work. (Our "quarter" is 25 years and more,) We provide dependable and stable rented housing services Our owners are long term investors, so profit must develop steadily and at a sufficient level with managed risks Our property assets are extensive and the ownership value attached to them must develop propitiously over the long term VVO site purchase, investment, disposal and repair policies and life-cycle economy (etc.) demand long term planning and operation Social responsibility requires VVO to adopt sustainable development principles :- ( -< 7 " (( + 7 " Customer-orientation as VVO core strategy (we seek a competitive edge from customer added value) Our objective is that the customer housing and service experience with VVO is better than with the competition Customer benefit is taken as a genuine basis for our business model The test for the success of the business model is the optimisation of the price obtained from the customer and the costs generated. The challenge is to combine customer experience-based innovations, earnings models and internal processes into a business model fulfilling profitability objectives We must be able to produce and deliver services to the customer efficiently, faultlessly and flexibly. This requires a high degree of internal productivity and supply chain management We base our competitive edge on our own housing management, sales and construction Application and channelling of capital and use of resources must be efficient and properly directed VVO's organisation, processes and information systems and expertise must seamlessly support a business model directed towards internal efficiency and customer added value. EEF 45 4 35 ='>?( + )'@/ 4 126 37 776 37 472 3811 381 36 551 35 413 35 19 32 13 J 3 28 957 25 2 19 792 2 878 22 347 24 462 15 15 347 1 5 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 8