The Finnish Construction Industry Association (RT) organized a Growth in Construction event in Helsinki on 14.2 February. The event featured the publication of VTT's recent housing production needs report for 2045 and sought solutions for the growth of construction. Minister of the Environment and Climate Sari Multala also brought the government's growth campaign goals and greetings to the event.
The construction industry wants to be involved in the growth debate and offer concrete ways to accelerate Finland's economic growth. Pressures on construction have increased further, including in terms of urbanization, the green transition, competitiveness and security of supply.
According to new population projections, the annual need for new housing to support urbanization and economic growth will peak at almost 36 units. The construction industry is ready to help Finland grow as a whole, but it also needs help.
“Growth lives in cities. Without housing in growth centers, there is no skilled workforce. Without workforce, there is no investment or economic growth. Unnecessary regulation must now be cleared from the path of sufficient supply,” summed up the CEO of the Construction Industry. Aleksi Randell.
“Construction regulation and land use must enable profitable housing construction based on customer wishes. Banking regulation, in turn, must enable access to housing loans at different income levels,” Randell continued.
Housing production lags behind demand
The event highlighted the regulation that slows down construction and the inflexibility of financing, as well as the resulting constraints on housing supply. In recent years, housing construction has fallen below 20 apartments. The construction industry's contribution to ensuring growth throughout Finland is key.
"The new European Union Commission is taking a determined approach to dismantling overregulation that is detrimental to Europe's competitiveness. We should consider doing the same with regard to national regulation. We have already improved regulation, for example, in the area of important green transition investments, and the government is ready to make the necessary additional decisions," said the Minister for the Environment and Climate Sari Multala.
“The construction industry and the Finance Sector have expressed serious concerns, especially regarding the tightened financial market regulation. The stability aimed at by the regulatory changes is an important goal, but we should also examine and assess the effects of additional regulation from the perspective of the growth of housing construction and the housing market. According to new population forecasts, the population in Finland is growing more rapidly than before. In this situation, the supply of housing must not become a factor limiting labor mobility and economic growth,” continued Minister Multala.
A necessary construction site worth hundreds of billions
The event highlighted the enormous importance of the construction sector to the Finnish economy: almost 60 percent of investments come from construction. Meeting the housing production needs alone by 2045 would mean a €180 billion project, 46 percent of which is tax revenue.
Minister Multala, Chairman of the SDP, were discussing the necessary actions and decisions. Antti Lindtman, CEO of YIT Corporation Heikki Vuorenmaa, Deputy Mayor of the City of Helsinki Daniel Sazonov and CEO of Nordea Mortgage Bank Jussi Pajala.
Pajala raised a misconception often repeated in public debate about the over-indebtedness of Finnish households and the dysfunction of the housing market.
"Going into debt is not a bad thing, it offers opportunities. I'll give you some free advice that costs nothing to implement: cancel the maximum term limit for housing loans to 30 years. It wouldn't affect the ability to repay loans, but it would free up money for other uses," Pajala suggested.
Minister Multala stated that amending the act was something worth considering.
See also
More information
Aleksi Randell
CEO
aleksi.randell@rt.fi + 358 9 129 9201Confederation of Finnish Construction Industries (CFCI)
Assistant: Lotta Räty
Merja Vuoripuro
Director, Communications and Responsibility
merja.vuoripuro@rt.fi + 358 40 587 2642Confederation of Finnish Construction Industries (CFCI)