The Bank of Finland estimates economic growth in Finland will slow down to less than one percent next year, although this year growth has been moderate.
"The signs of slowing down are clear," says Meri Ostbaum, Head of Forecasting at the Bank of Finland, who spoke at Euro & Talous conference on Tuesday, reports Kauppalehti.
The Governor of the Bank of Finland Olli Rehn notes the Finnish economy continues to be in a transition process and still needs to adapt to changes. One of these is the ageing of the country's population of 5.2m, and another is the setbacks that followed the 2007 financial crisis, from which Finland has not yet fully recovered, Rehn says.
Petri Jokinen, fund manager of FIM's EUR300m Asuntotuotto ("Residence Return") residential property fund, does not expect the slowing down of economic growth to have noticeable effect on real estate investments or demand for rented housing in Finland, however.
"Urbanization will feed rented apartments new residents. People will keep on moving from the countryside to large cities for decades to come. Earlier slowdowns have had actually quite minimal impact on the flows of people moving to large cities, as well as rented housing," he tells AMWatch.
"Slowing down of economic growth has not affected real estate prices much before. The smaller correlation with the economic cycle is the reason why many investors want to keep real estate in their portfolio," Jokinen adds.
According to the estimates of Helsinki's City Executive Office, the population of the capital is expected to grow by more than 170,000, to exceed 820,000 people by 2050. The population of the entire capital region including nearby municipalities is expected to exceed 1.92m residents by 2050.
"This projection is a good point to keep on investing in rented housing here," Jokinen adds.
FIM Asuntotuotto benefits from this growing demand for residential housing in the capital region as well as in large cities.
This week it expanded its investments by completing a residential real estate project at the heart of Helsinki, where it turned an office complex and laboratory into 111 rented flats for students and senior citizens, as well as seven offices and a heated garage.
The premises, which FIM purchased in 2018, formerly housed the Institute of Occupational Health.
The fund, which has approximately 2,000 flats either in the portfolio or under development, is now about to start the renovation of another project at the heart of the capital and has an investment capacity of approximately EUR600m for new investments.
FIM Asuntotuotto has some 12,000 investors, including several foundations and associations.