Plot prices have risen on average more than apartment prices over the past two decades. However, regional differences are large. In the capital region, plots of land were significantly more expensive than apartments until 2008, but since then their price development has followed the same pace or even slightly slower than apartments.
Among the twenty largest cities, the prices of plots in relation to apartments have risen the most in Tampere and to some extent also in Turku, Jyväskylä, Lahti and Seinäjoki in twenty years. After a sharp rise, the plot's share of the apartment's price has remained relatively stable in Helsinki, Espoo and Vantaa since the financial crisis. In the long term, the decline has occurred especially in Hämeenlinna, Kouvola and Pori.
The Land Surveying Institute studied how the prices of plots and apartments have developed in relation to each other between 1988 and 2015. The calculated share of the subsoil in the price of the apartment was determined by comparing the prices of all apartment lot deals with the prices of housing cooperative apartments that are over 25 years old. The review was now done for the first time with an exact regional division, practically by postcode area. There is no statistical information on the prices of new apartments with this accuracy.
"This year, it was possible to add information about the location in a certain postal area to the purchase price information of plots. This gave us the opportunity to also find out how the central areas of cities differ from the edges, and how within the metropolitan area the share of the plot of land in the price of the apartment varies," says the Land Surveying Institute's leading expert Risto Peltola.
The internal differences between Helsinki and a few other large municipalities are large. With Kalasatama and Jätkäsaari, the focus of construction in Helsinki has shifted from the suburbs back to the inner city. According to Peltola, plots in the inner city of Helsinki surprisingly did not turn out to be particularly expensive compared to apartments.
"In Helsinki, the comparison is made difficult by the fact that in some areas there have been very few plot deals, the plots are often unique, at least in terms of location, and there may be special conditions attached to them. In the new areas of the inner city and for example in Pasila, high construction costs lower the price of the plot. They incur additional costs due to, among other things, difficult ground conditions, underground parking and building on top of traffic lanes," Peltola explains.
In the suburbs of Helsinki, the relative land price is even higher than in the inner city of Helsinki. Peltola warns the city against overpricing suburban lots if they want to promote additional construction in these areas.
A lot costs a large slice of the price of an apartment in growth centers
"Plot prices are not directly reflected in apartment prices, but they affect the willingness of developers to start new projects", states the management advisor Tarmo Pipatti Rakennusteollisuus from RT, which was one of the clients of the study together with Rakennusliito and Y-Säätiö.
According to Pipati, the recession slowed down construction and the development of plot prices for several years. A study by the Land Surveying Institute shows that the calculated share of the plot of land in the price of the apartment has settled between 20 and 38 percent in the largest growth centers, and even less than ten percent in the smaller central cities of the provinces. The share is somewhat lower if you look at the plot in relation to the price of a new apartment.
"Availability of plots is the most important factor in terms of curbing housing prices and also the production of affordable rental housing. In the capital region, the supply of apartment building plots has clearly grown in recent years, but there is still a shortage of plots. The central task of cities is to constantly maintain a sufficient reserve of plots suitable for construction," says Pipatti.
Materials
The report, bulletin and other materials of the land price survey can be found at www.rakennusteollisuus.fi/maanhinta.
More information
- Leading expert Risto Peltola, Land Survey Institute, tel. 040 801 7674
- Management advisor Tarmo Pipatti, Construction Industry RT, tel. 040 506 5021
- Chairman Matti Harjuniemi, Rakennusliitto, tel. tel. 050 1586
- Director of Communications Merja Vuoripuro, Construction Industry RT, tel. 040 587 2642