"As the US economy decelerates sharply, the growth of the global economy is expected to slow down. Uncertainties concerning the prolonged credit crisis in the US, inflation and exchange rates hamper the assessment of the construction market outlook.
The US-led financial market turmoil increases uncertainties in the real estate market.
The residential market in Finland slowed down in the first part of the year and the volume decreased. Residences stay on the market for a significantly longer time before being sold. The demand focuses on completed units. The number of residential start-ups has decreased.
Availability of subcontracting and materials has developed favourably.
The economic situation in the Baltic countries has deteriorated quickly. The housing market has clearly cooled down and private consumption is adapting to the slower growth pace. Due to the fast pace of growth in recent years and the small size of the market, the assessment of the outlook for economic growth in the Baltic countries involves uncertainties.
Revenue in the Housing business area amounted to EUR 63.1 million (EUR 84.0 million) and operating profit was EUR 1.3 million (EUR 4.8 million). The decline in both revenue and operating profit was attributable to the slowdown in housing sales. The housing sales picked up during the second quarter of the year increasing the revenue and operating profit compared with the first
The share of revenue generated in Finland was 90 per cent (90%), whereas 10 per cent (10%) came from Russia and the Baltic countries. Revenue in the Business Premises business area grew to EUR 197.0 million (EUR 151.6 million). Revenue in the Housing business area declined to EUR 63.1 million (EUR 84.0 million)."
The US-led financial market turmoil increases uncertainties in the real estate market.
The residential market in Finland slowed down in the first part of the year and the volume decreased. Residences stay on the market for a significantly longer time before being sold. The demand focuses on completed units. The number of residential start-ups has decreased.
Availability of subcontracting and materials has developed favourably.
The economic situation in the Baltic countries has deteriorated quickly. The housing market has clearly cooled down and private consumption is adapting to the slower growth pace. Due to the fast pace of growth in recent years and the small size of the market, the assessment of the outlook for economic growth in the Baltic countries involves uncertainties.
Revenue in the Housing business area amounted to EUR 63.1 million (EUR 84.0 million) and operating profit was EUR 1.3 million (EUR 4.8 million). The decline in both revenue and operating profit was attributable to the slowdown in housing sales. The housing sales picked up during the second quarter of the year increasing the revenue and operating profit compared with the first
The share of revenue generated in Finland was 90 per cent (90%), whereas 10 per cent (10%) came from Russia and the Baltic countries. Revenue in the Business Premises business area grew to EUR 197.0 million (EUR 151.6 million). Revenue in the Housing business area declined to EUR 63.1 million (EUR 84.0 million)."
For those still thinking that the housing market has not yet turned around, for those who are still on denial, SRV, a Finnish Contruction Builder, is not only providing the proof that the Finnish housing market has come to a sudden halt but is clearly showing that the situation is deteriorating and fast... I will not be surprised to see SRV merging with YIT in order to limit the damages and of course lower their costs which will have an impact on unemployment no doubt about it.
Housing market is cyclical by nature.
The Finnish market has enjoyed a 15 years of continuous growth. In the past 3 years it has mainly been driven by euphoria, low interest rates and "Doctor Jekkil" type bankers...
So the party is over. Now, it's about time to assess the general impact of declining assets on the wealth perception and ultimately on the consumption. Should the consumer slow its spending pattern or stop taking more debt, banks business model will be jeopardized. Lending for house purchase will slow dramatically as banks won't have the necessary leverage to lend. The spiral will start pushing house price lower.
Unless a miracle happen...
I don't think so.
2 comments:
with 90% of their operation in Finland, I'm wondering how they are going to fund futher project if the market deteriorate as forecasted.
I know that they are currently building lots of Flat...so either they can't sell and they fill for bankrupties or they start cutting price drastically for at least recovering part of their investment.
Time are hard for highly undebted company as borrowing large sum is either very costly or impossible.
I'm wondering who will buy SRV? Skanska, NCC, YIT or noone...
Not sure what to make of the following graphs that show spain france uk and italy with dramatically greater house problems than either the US or of Finland.
On this basis Finland and the US have been very prudent.
Any thoughts??
http://img267.imageshack.us/img267/5443/ixis2uh8.jpg
Post a Comment