Finland’s housing crash: worse than the 90s depression

Housing construction in Finland has collapsed to historic lows, with just 14,000 starts forecast for this year. The construction union Rakennusliitto is demanding government action ahead of this week's budget negotiations.

Finland’s construction union Rakennusliitto is calling on the government to act on the country’s deepening housing crisis ahead of this week’s budget framework negotiations.

Union chairman Kimmo Palonen warns that housing construction has collapsed to levels not seen since the 1990s recession, and argues the crisis is actually worse.

Five years ago, Finland started construction on up to 45,000 homes per year. This year, the figure is forecast to fall to just 14,000. Research institute VTT estimates that more than 30,000 new homes per year are needed to meet demand.

– This is a deeper construction crisis than the great depression of the 1990s, Palonen writes.

Nearly 20 percent of Rakennusliitto’s members were unemployed in March, and more than 1,500 members lost their unemployment benefits during the past year.

The union is calling for an overhaul of subsidised rental housing support models, a significant increase in state loan guarantees and the removal of transfer tax for first-time buyers at least until the end of the year.

– The government must make its first responsible decisions to boost construction at the budget framework session starting tomorrow, Palonen writes.