Rental licence may be adopted in Finland
Finland has introduced new rules to regulate the short-term rental market. A number of municipalities have made proposals to tighten regulation in the sector. According to the bill, from 2025, some regions will be able to issue a rental licence.
So far, the Finnish government is only considering changes to the law, but many cities are in favour of the changes. According to the proposed rules, a homeowner who wants to rent out a property on a short-term basis must now apply to the local authorities for a special licence. Based on the licence, the flat in question will receive the status of a property used for commercial purposes.
It is worth noting that similar regulations are already in place in Helsinki and Tampere. In these cities, short-term rental apartments operate according to 11 criteria, which makes it possible to better regulate the processes in this market. A similar practice will take place in other popular regions, for example, in Lapland. Municipalities recognise the importance of the short-term rental sector for the local economy, especially in tourist destinations. Their regulations should be more lenient than those in the capital.
Overview of the real estate market in Finland
The Agency for Land Management presented data on the dynamics of the real estate sector for the first half of 2023. According to the report, the number of transactions with private houses (both for permanent residence and recreation) decreased during the period. The main factor behind the decline in activity, analysts say, is the rise in inflation, which has led to an increase in interest rates.
Highlights of the real estate market review:
– 19,630 transactions in the first half of 2023, down 21% from the previous period;
– the same number of transactions as in the 1990s and the lowest since 2000;
– 2,460 detached houses bought in urban areas, a 34% decrease compared to 2022;
– the average value of the property fell by 15% to 160 thousand euros.
The highest house prices were in the Helsinki area – 315 thousand euros. Housing in Jyväskylä was popular with buyers. Here the highest number of transactions in the country was 85. However, this figure is 35% lower than last year. The average price of a house bought here was 225 thousand euros. Kouvola came next in terms of transactions, with 80 properties sold at an average price of €90,000.
As for holiday homes, there were 550 transactions in the six months. This figure is 24 per cent lower than in 2022. The average cost of such housing in Finland was around 95 thousand euros.
We can generally speak of reduced activity in the local housing market. Buyers are quite cautious in their decisions due to the instability of the economy and rising interest rates.