Wednesday, 31 August 2011

Housing and Demography

"At the end of 2010, the number of families with children totalled 582,000... the lowest figure ever recorded in the statistics, with a decline of 1,800 from the year before...

Twenty years ago in 1990, the total number of families with children was still 640,637, and approximately one half of the population were part of a family with children

Source: Statistics Finland

The number of families is at historically low and lower than it was in 1990 - really astonishing!

A similar discussion on this subject had already occurred in the blog, refer to "Population Perspective"

Indeed, Finland is facing with very serious issues. family formation is on the decrease and is getting older. In the meantime, housing building permit had an exponential growth in the past two decades and price tripled. A real conundrum for assessing where the finnish economy is heading and particularly how the housing market will behave in the next two decades.


Anonymous said...

When I first came to Finland the city I was in had a serious problem with housing shortage, even though the population was stable (or falling as people moved to surrounding towns) and new houses were being built. The reason for this was the change in family structures with the average number of persons occupying a house going down each year (ie more divorces, split families etc).

This effect might continue to help keep the housing market up. Although given the figures you present (frankly the scale of them was a shock to me) means that there should be significant effect in the larger family-sized dwellings.

"Island Crow"

Anonymous said...

I believe there will be more of the same ie. more and more concentration of communities around the cities where the jobs are and more empty homes and ghost properties in the north and in remote areas. I believe there has been an ongoing trend where younger people from rural areas continue to move to the cities looking for where the universities and the jobs are. The opportunitiy of course in Finland is the possibility to actually own property and land of a proper size which is impossible in other countries. So the real question is how to revive villages and communities in remote and rural areas if less and less people are living there. Because of this, the demand for housing in cities will remain high. This is also the reason that prices have been going up over the past years despite the econimic crisis. Further loss of jobs is of course not favorable, but it seems to me that even older people are liquidating their assets and moving close to where the services are.

HousingFinland said...

Anonymous, I don't believe this argument as it could be implied in any type of bubble formation to explain it. But history has shown the contrary: 1990 bubble in Finland, US bubble in 2008 etc.. etc...

Anonymous said...

Hi Housing Bubble,

Actually Figure 2. in this study supports my claim;

"prices have developed more favorably in the Helsinki Metropolitan Area than in the rest of the
country. The difference in price growths has enlarged since 1996."

Anonymous said...

and "In the HMA and in a couple of
other centers, the regional price levels have diverged from the whole country due to increased
migration from peripheral areas, especially since the 1990s."

(page 7. from that same study)