Monday, 3 December 2007

Katainen: Housing Production Will Accelerate

Jyrki Katainen is the chairman of the Finnish National Coalition Party (Kokoomus) and the current Minister of Finance of Finland.

"The temporary good times, which have existed, are simply falling behind", Katainen said to Helsingin Sanomat on Thursday.

"Katainen does not expect an actual recession, but the growth rate in the economy is far too slow in his view, to cover the costs of a welfare state."

"All measures need to be taken into use, and many more ideas need to be invented for achieving growth", he said.

"To improve the situation, the government plans to take measures to improve productivity, speed up reform in the municipal and service structure, and accelerate housing production in the Helsinki area, in order to ease the shortage of labour."

So increase supply and speed up municipalities reforms (especially concerning land planning monopoly?) will be the perfect storm for the housing market. Most probably 2009-2011 would see prices coming back to a more natural level and allows "low/average salary" labour to live and purchase properties in the Helsinki suburbs...

"There have been no new turnarounds in the economy, and factors which slow down growth have long been known." Katainen said.

Mr Katainen seems to see rougher times ahead... what was 2001? not a turn around?? right the housing market boom stabilized the economy... Then he is throwing a riddle "factors have long been known", is it the high leverage of the consumer?, the housing market correction?, the global economy overheating?, low global interest rate unsustainable?

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