The third quarter of 2022 saw the market share of newly begun wooden multi-storey building construction projects (construction starts) rise to 6%, which is the second highest result in ten years. The number of wood-framed apartment building starts rose by 10% while the overall volume of apartment starts shrank by 16%. The proportion of wood in public construction shrank, as starts overall decreased by 20% but wood-framed starts fell by 30%.

The third quarter of 2022 saw the market share of newly begun wooden multi-storey building construction projects (construction starts) rise to 6%, which is the second highest result in ten years. The number of wood-framed apartment building starts rose by 10% while the overall volume of apartment starts shrank by 16%. The proportion of wood in public construction shrank, as starts overall decreased by 20% but wood-framed starts fell by 30%.

8% more building permits were issued in total in the third quarter. The number of available permits for detached houses was already at a good level, while permits fell 24% for apartment buildings and 33% for detached houses. The number of permits for other kinds of construction went up significantly. Applications for wooden apartment buildings represented only 2% of new building permits.

As predicted, economic growth slowed down in the third quarter of 2022, and total construction fell off by 25% over the same period. Starts had already begun to decline at the beginning of the year, but the trend intensified as the year came to an end. Despite a sharp decline of 34% in the quarter, apartment building starts are still at a historic high level representing 30,000 apartments annually. In the same period, small house starts fell by 24%, whereas commercial, office, and care sector building starts continued to increase.

The housing market is seeing a significant drop in the number of people looking to buy a home. In Finland’s capital city region, the supply of rental apartments is currently still three times as high before the pandemic. Sales of new apartments fell off by 40% in the third quarter. In 2022, the number of non-subsidised apartments available for sale increased by more than 120% in Finland’s capital city region. Due to the record high level of starts, this situation will not get easier soon as a lot of rental and owner-occupied apartments will enter the market.

Construction costs are not climbing as much they were and have even started to decline for some products. In October, construction costs were 6% higher than those of the same month in the previous year. Construction material prices were 10% more on average, while wood material prices fell by 10%
compared to the previous year.

In neighbouring Sweden, the share of new apartments in all wood-framed apartment buildings continued its long-term increase. New apartments made up 18% of the total in 2021. Measured in absolute terms, there was a 7% growth, which equals a total of 4,397 apartments. Source: Statistics Sweden and Träoch
Möbelföretagen, TMF.

Read the article in Finnish here.