RE: Is crypto a great deal from the insignificant?
The Finnish housing bubble is tiny compared to even Sweden or Denmark let alone most of the alone the UK, Australia or parts of North America.
To suggest that the whole country is in a housing bubble is ridiculous. The prices are slowly falling everywhere except for Helsinki urban area or the most wanted locations in a few of the largest regional centers. In fact, this has been the case since 2012. The housing market as a whole is very far from bubble territory.
A house in the suburbs of Tampere (guessing here) that was bought in 2008 is supposed to be nominally cheaper now, absent major renovations. Real incomes have gone up moderately since the financial crisis of 2008. But the house prices have stalled, relative to the rise in average real income, pretty much everywhere except for Greater Helsinki.
Very little demand on old houses and unrenovated apartments. You have to look at the differences between new and old, with new apartments climbing in price.
https://www.etuovi.com/kohde/9964771?haku=M1460203983
This one is in Ikuri on the western edge of city. Built in 1965. The surfaces have been done in 2012 but it is not mentioned that the bathrooms or the sauna would've been renovated. The living space is only 123 m2. Storage and other extras 60 m2.
In addition to the surfaces, a new bathroom with a shower has been built on the second floor. But if the main bathroom and the sauna are in original condition, as it reads and sort of looks like, that alone is a big minus. What about the condition of the roof? It's 55 years old. No proper drains below the gutter downpipe shoes. The whole guttering is basically a watering system for the footing. I would like to know if the drainage system around the footing is working. The water coming from the gutter downpipes is not led at least three meters from the house as the code says it should be since the 1990's.
What this house has going for it is the surface renovations inside and the fact that it's a freehold and that it has geothermal heating, which is the lowest cost heating option.
They're still asking €284,000 for it. I've noticed that the old houses are not that cheap compared to newer ones even here in Lahti where everything is 30 to 40 percent cheaper than in Tampere.
https://www.etuovi.com/kohde/m27767?haku=M1460206236
This one is in Niemenranta for 279K, 62 m2.
I sold a similar place 6 years ago next to the Tre Työväen Theatre right in the middle of the city for 110K less, and I was able to sell slightly higher than the average price in the area due to the renovation and made about 50k over what I paid in 2008. The prices on new places are insane.
Oh, and I was paying 120€ HV.
People are pushing themselves to the max to buy these kinds of places and there are tens of thousands f them around Finland it seems. When the economic crisis comes and pushes interest rates upward and those on the edge can't cope, watch the prices tumble. If you want a new apartment, have your cash ready.
That's very true. I could understand Tampella close to the rapid and the lake. But Niemenranta. It's too far from the city center.
Yes, you're right about that segment of the market.
It really is insane. There will be 5-10,000 people living there once it is done. 15 years from now, it won't be new and the people who bought there won't be able to sell. They are creating the future slums.
Edit: Finnish slums that'd be. Not exactly the Barrios of Brazil.
I could stomach €200,000, somehow. But €280,000 at that distance from the city centre, despite the tram terminus and the lake right next to the building? Even with the gorgeous lake views, the price level is too much for anyone rational.
I would be wary buying there with lake views, as they have been selling them for years with lake views, and then building the next string of buildings in front of the last. It is like that nonsense student building that they put in the middle of Tampella. I'd be furious if I had bought a few years earlier at a premium, only to end up looking at blank wall.
Yes, that part of the housing market is in bubble territory. The trick is that only a half or so of the loan is personal. The rest is in the name of the corporation owned by the homeowners. The buyer only pays interest on the corporate loan for the first couple of years...
Yes. And they get used to paying a low amount for a couple of years + no HV or YV for many in that time too... then suddenly, they have 1500€ to cover - it is going to be a bit of a lifestyle shock for them. Add a percent or two interest rate climb, or the 5 it was in 2008 and things get painful very fast.