There isn’t really a way; of course, a consent clause could be added to the articles of association. Usually, by the time shares are sold to someone with no assets, the apartment has been on the market for a long time and has surely been offered to the housing company as well for a nominal fee, but they don’t want to buy it. Often, these units can’t even be rented out. It’s simply a matter of who is left holding the “Old Maid” card.
1 Like
If I were in need of a new apartment, I would be putting on my “buying trousers” right now. Prices have been falling for a long while and the general sentiment is still poor, but signs of a turnaround are starting to appear everywhere. It’s a good buying opportunity, perhaps even a “value investor” type of entry point.
21 Likes
This really hit the mark. Today I closed the deal on a new apartment, bought directly from the developer. With a bank loan, of course, but without Nokia, the deal wouldn’t have happened 
25 Likes
What about the old one? It’s a favorable time for first-time buyers, but for someone trading up from an old, poor-condition property to a newer and better one, the price gap (väliraha) has likely only increased in recent years.
1 Like
For many apartments, the 2021 peak was actually a better time to buy if you played your cards right with interest rate-protected debt.
In my opinion, the purchase price + financing costs are currently not a very attractive package compared to before. And if you buy an apartment without debt, you then have to account for the alternative investment yield.
5 Likes
In a way, yes, but back when interest rates were still at zero, many here would have recommended Euribors while looking in the rearview mirror.
In the same way that we now see that a fixed-rate loan with a low interest rate would have been a good move, it might be that after a few years we notice, for example, that now would have been a good time to liquidate investments, or that the calculated alternative investment return in that calculation wouldn’t have held up.
Perhaps there are quite a lot of variables in that calculation. From my own perspective, I bought in 2021 with a floating rate, but with so little debt that it could be paid off with the current cash position if desired.
This! I was buying a property in 2021 and I recall the fixed interest rate offer was 1.2%. I passed on it because I understood that the fixed interest would have to be paid for the entire loan term even if the apartment was sold. Of course, I’m kicking myself now!
Returning to this news piece: “Consideration of buying a home was at its lowest in the history of the measurement, i.e., since 1998.”
Could there even be better headlines for a real estate investor?!? Of course, I know there are more financing constraints than before, and taking advantage of these “rainy days” is only possible for a more limited group. I must admit, I’m a bit surprised by how negative and reserved the atmosphere has remained this spring in the real estate investing scene (on forums/podcasts/social media).
It was truly distressing back when the Rintanens were sharing investment tips on their social media about how easy it is to get rich. And how they managed to switch their own loan portfolio to fixed interest rates at the last minute, partly based on social media tips from followers. The comment sections and discussions on the Rintanens’ social media in 2022 were truly distressing.
Or when Huru’s podcast features the seventh guest in a row explaining how to build a 12-apartment portfolio in just a few years. And Huru praises how wonderful it is that the guest’s main job is now producing their own real estate investment-social media-podcast-education-coaching-snowball content for entirely new target groups interested in property investing… Listening to Huru’s podcasts in 2022 was truly distressing.
Shouldn’t this thread be the hottest, most optimistic, and enthusiastic discussion on the whole forum given these “lowest in history” headlines? Filled with reflection and hope that what if this phase actually lasts at best until the end of 2027?!?
Fellow investors. Let’s enjoy the distress and be greedy. 
27 Likes
I agree. Average earnings relative to apartment prices are currently at a fairly good level, even in the Helsinki metropolitan area. I don’t understand the complaining about interest rates; this is a perfectly normal level. The zero-interest era was not. However, it’s worth noting that real estate is so-called late-cyclical, meaning it rises following the rest of the economy. I won’t predict price levels/development for -26 because it’s not relevant, but on a couple-year horizon, apartments will likely be higher than they are now. What has been a better moment in the 2000s to buy, for example, your first home?
HS (Helsingin Sanomat) articles are a bit clickbaity, and individual news stories shouldn’t be over-interpreted, but mortgage applications are being sought quite briskly now, which is a good thing. Additionally, the trade of larger apartments in Uusimaa—especially in Espoo, but also in other cities—has been performing well for some time (this was mentioned, for example, in OP’s housing webinar). Some real estate investors burned their fingers so badly on “guaranteed returns” that it will take longer for the large masses to return. And then there are those who simply continue investing in real estate. I only got involved last year, as I didn’t understand the business logic during the zero-interest era if rates were to rise. And now I don’t understand why stock investing is hyped as a “sure thing” while real estate is shunned.
7 Likes
At least at Osuuspankki, it was possible to pay off even a fixed-rate loan prematurely, either in full or in part, without any penalties. Additionally, there were products available very close to fixed rates that were technically interest rate caps (korkokatto). I myself have an OP interest rate cap of 0.01% on my loans, on top of which there are costs of just over 1.2%.
When considering the sensibility of property acquisitions regarding interest rate levels, I don’t think the essential factor is whether you took an interest rate cap in 2021 or not. If you didn’t, you likely bought the apartment on the assumption that interest rates would never rise. And that’s exactly what all the “Hypo-Juhanas” of the world were preaching to us. If you buy an apartment now, you make your interest rate calculations based on an entirely different foundation.
The equation of property prices + the cost of financing is not particularly attractive. Especially since better returns are available for low-risk investments than in 2021. I’m not saying now couldn’t be a good time to buy investment properties, but I don’t think the situation is extremely attractive from a “now we’re scooping up quality at bargain prices from the market” perspective.
3 Likes
Nothing forced anyone to tie their loans to variable interest rates.
Neither stocks nor real estate are “sure things” as investment assets. However, the expected returns for even the safest stocks are now something quite different compared to the zero-interest era. For example, the dividend yield of Elisa—often cited as a substitute for fixed-income securities—floated at lows starting with a three during the zero-interest craze. Now, a dividend yield of over six percent is available.
When interest rates have risen and the returns of alternative investment assets have increased, it adds pressure for higher yields on properties as well.
2 Likes
Yes, I agree regarding stocks. I didn’t understand the HEX valuation at 9,000 points, and I don’t understand, for example, Nokia’s valuation now. In my view, many so-called industrial stocks in Helsinki are not overpriced yet. But my point was that there is risk in stocks. It’s a different matter which ones will see that risk realize and when (Finns have experience with this regarding Nokia, for instance). As for apartments, valuations cannot fall indefinitely in growth centers (excluding the darkest scenarios of war, deflationary depression, etc.); otherwise, no one will build new ones to replace them (and I’m not talking about municipalities where the population is declining). Right now, there is specifically a gap between the prices of new and old apartments. Due to this, some so-called new production is also being sold at a discount (some are not selling, at least not yet). Since -23, very little new production has been built precisely for the reasons mentioned above.
An agent told me very well 25 years ago, when I was presenting complex economic theories, that the housing market is driven by interest rates, employment, and through that, confidence. Improving employment and the resulting increase in confidence is the trigger that is still missing for the housing market to recover. An interest rate level of around 3% is normal, which a long-term real estate investor or home buyer must be able to adapt to (there will surely be times when the rate is lower or higher as well).
5 Likes
One of the most significant variables here has indeed been the removal of the mortgage interest tax deduction. It didn’t matter for ten years, but now that interest rates have risen, the loss of this benefit for buy-to-let investors has become quite substantial, while the prices of new builds have simultaneously increased sharply.
In fact, in the areas I’ve been monitoring, you’d almost have to be illiterate in math to consider buying a new build a financially sound decision. This is especially true considering that, if I recall correctly, the price gap between new and old apartments is currently at a record high on a national level.
6 Likes
there was no interest deduction during the zero-interest craze of '20/'21, which was the peak of the housing market ('21). For the past couple of years, new apartments have mostly been sold at some level of discount. The only “bomb” I still see is leased plots (land leases). For those, this 40-year loan—even for a housing company—is much better than these leased plots with their automatic increases. Housing company loans are at least still tax-deductible for buy-to-let investors. Of course, it is clear that the minimum nominal prices of apartments must turn upward in growth centers for real estate investing to be sensible even in the medium term (2-5 years).
The problem is specifically those leased plots. Additionally, they seem to be coupling many terraced houses with district heating, which isn’t a very cost-effective option in today’s energy-efficient homes, at least given the price levels of the local district heating company.
You only need to add up the maintenance fees and factor in a bit of interest, and the rental levels for similar apartments in new developments don’t differ all that much. You also have to amortize the loan, so for many people, it’s difficult to justify owning over renting on a cash-flow basis.
2 Likes
The income of those in permanent employment and working full-time, yes, but there are more and more wage earners outside of this group working as light entrepreneurs, short-term contract workers, and part-timers.
6 Likes
Okay, thanks for the tip regarding Osuuspankki; that was good information for the future, as I am a customer of that bank myself. Few banks likely have the same.
Then, to the general discussion on investment properties. In 2009, I bought a studio apartment in the center of Helsinki for my own use, which fortunately will be paid off with rental income in a few years. In recent years, I’ve been shocked by how property maintenance and property management fees have spiraled out of control. The quality of renovations also seems to be worse. Property managers are bleeding money through various types of separate charges and technical property managers…
5 Likes
By the way, I’ve noticed and wondered about the same thing.
At least in the property management scene in South Helsinki, something seems to have broken over the last 15 years. Regarding property management (isännöinti), maintenance, and renovations, one constantly encounters clumsy attempts at price gouging and a widespread lack of professional pride. Nowadays, it seems surprisingly acceptable to throw unjustified costs or outrageous overcharges onto an invoice, while simultaneously leaving work undone or unfinished.
In the last few years alone, I’ve personally encountered examples like a technical property manager who billed 27 hours for supervising a shareholder’s renovation but couldn’t explain at all what was actually done during the project. Or a maintenance company that billed 12–19 visits entirely at evening overtime rates. Or property managers, one of whom didn’t show up to the annual general meeting at all, while another stated they had a couple of such demanding properties that they wouldn’t be doing a single thing for my housing company for the entire year. Of course, additional services that would surely interest the board were readily available for a fee.
Sometimes “professional board members” are offered as a solution—or the logic of “pay more to get quality.” In my experience, professional board members are good at ordering various surveys and planning studies, while lacking any sense of cost-consciousness. And paying more for property management or maintenance doesn’t necessarily get you anything better than the bulk service.
Even though regulation has increased as a result of successful lobbying by the construction industry, managing a bathroom renovation or a 30-apartment building in Töölö isn’t significantly more difficult than it was 10 years ago.
36 Likes
First, my apologies—it might not be appropriate to bring individual apartments here for evaluation one by one, but as a one-off, I thought I’d test the waters to see how the forum experts operating especially in Tampere (at least @JuhaR, if I’ve understood correctly) value an apartment like this. The location would be excellent for me, as I make almost all my trips by train. This is likely a situation where the interest-only years on the housing company loan are coming to an end, though that wouldn’t matter to me since this would be purchased debt-free. The small square footage doesn’t bother me; of course, one could get more square meters from older housing companies in the same area. However, in one’s sixties, one doesn’t necessarily want to live under the threat of extensive renovations. There is even a gym in the building, and the maintenance fee (hoitovastike) is almost laughably low for a long-time renter 
. The core question, of course, is whether there is “air” in the asking price:
4 Likes
Even though I own an apartment nearby, I haven’t followed the prices in that specific area very intensively for years. On a general level, however, I would say that suggesting the price you mentioned for a property like that would hardly be considered an insult, as might have been the case five years ago. I’m fairly certain the seller will at least come back with a counter-offer.
The area itself is quite popular, but the high volume of construction in recent history is visible there as well, and some projects have also been put on ice: Kaisa Kuuppo on katsellut ammottavaa monttua jo kaksi vuotta – tästä syystä työmaa jäi lähtökuoppiin Tampereella | Kotimaa | Yle
On the Tammela side, there are still a fair number of housing companies with owned plots (omantonttinen) available. On the other hand, the Tulli area on the right edge of the preview image, or the Kaleva area starting just behind the photo, are almost exclusively residential areas with leased plots (vuokratonttinen). If you were to buy a studio with similar square footage from the older building stock in those areas, it would quickly cost that same 150k. Compared to that, the property you linked isn’t terrifyingly priced, and the quality of the location holds up well in comparison.
The location is indeed excellent when considering the railway station, Tammelantori market square, or the high-quality K-Supermarket. Not forgetting the Salhojankatu pub, of course. Speaking of a second-floor apartment, I would consider whether the fairly busy street in front of the building is an issue. The nearby stadium may also bring more noise than usual to the surroundings.
As you can see, I’m rambling about things slightly outside your actual question.
5 Likes