In the recent Housing Production Demand 2040 study, VTT has found out how much and where should be built in the future. The total annual need is an average of 30 new apartments, which is slightly more than the estimated need and realized production in recent years. However, the construction and HVAC installation have already endured for four years in the grip of low new construction.
The question is: Will new construction start? More than 760 new apartments are needed by 000 for the fourteen largest urban areas in VTT's study. It is almost the same amount as has been built in the entire country in the last 2040 years. The acceleration of immigration may raise the total need for new apartments to more than 25 apartments. In the rest of Finland, the need to build new apartments remains low due to weak population growth.
The share of housing production in the largest urban areas has already risen to almost 90 percent of all completed new housing. It will grow even more if urbanization continues along the same development path as it has now.
The need for housing production was assessed on the basis of two alternatives, a conservative forecast and an urbanization scenario. In the urbanization model, the total need for housing is clearly greater, because the population increase of growing urban areas requires them to also strongly increase their housing supply. In this case, an even larger part of the current apartments are located, as it were, in the wrong places. A total of 25 new apartments would be needed over 760 years, i.e. 000 per year. The share of the fourteen largest urban regions would be 30 percent.
In the declining development model, the existing housing stock, on the other hand, better meets the need. New production would require a total of 620 apartments, i.e. an average of 000 apartments annually in the period up to 25.
There is a considerable societal challenge ahead, no matter which model is implemented. For example, Helsinki region needs 50, Tampere region 40 and Oulu region as much as 54 percent more apartments compared to the current housing stock. There is a risk that the housing shortage will sometimes become a plug for economic growth that may start.
Housing production demand 2015 – 2040 report (pdf)
Jari Syrjälä
CEO
LVI-Technical Contractors LVI-TU ry
The text was originally published in the Syrjälän blog On LVI-TU's website.
Write a comment