The Value of Houses
In HBL of Sö 9.02.20, p.5, it was mentioned that in the ”gamla gruvorten Otamäki i Kajanaland” it was in the summer of 2013 possible to buy a three room flat with a balcony for 18.000 Euros. And if I think about it, my two room flat with a balcony in South Helsinki will at the moment be something like 15 times as expansive as that. All of which is a rather striking illustration of the in the media often mentioned problem that in very large areas of Finland the value of houses is going down.
According to the logic of the market this is simply self-evident: where housing is in short supply, the price of houses and flats will go up, and where people want to move away (because they, e.g., cannot find a job where they live), there will be a surplus of flats or even houses with the result that the prices will go down. And in a FREE market economy there will be hardly any limits how far the prices will go up or down. Which in turn can lead to political consequences – especially in Finland, where people are used to own their living places (already because of the fact that also the prices for living in rented places are free, i.e. easily huge). The situation is that people who have been paying for decades in order to be able to retire finally in a place where they can feel safe (because they OWN it) suddenly notice that the value of their place is going down, so that they, e.g., cannot pay for a place in a town to which they may have to move for a new job by simply selling their former place. Nor will a bank give them as much credit as they may need or have hoped for when offering their living place as a security. Altogether, the free market has made their lives very insecure, with the consequence that they will feel bad, may (with the ”help” of the Sannfinländare) also arrive at the conclusion that that elite in Helsinki has simply forgotten them and that it might be time to vote for a party which is willing to ”do something for the people”.
Well, it is mainly outside Kehä III that the prices for houses go down, which makes this a problem for especially Centerpartiet. But if one wants Finland to be a democracy also in the future it might be a good idea if ALL parties could switch their heads on. Needed would be quite a bunch of good ideas. Could one, e.g., think of new ideas what jobs to create in the areas which have been given up by industry (because, e.g., some mines were exploited to an end)? In the area of Kajaani there might be possibilities for environment-friendly agriculture (which in turn might attract nature tourism), perhaps also winter sport tourism (as in South Finland the winters do not offer many possibilities any more). For forestry the government could help by supporting the construction of houses from wood. For people who have moved out from the area in search of a job, it might be an idea that cities or even the government could build reasonably cheap flats for rent (so that it would be less important for the newcomers to be able to sell their former places for a good price). And so on. One should think, and think more, then also DO something. But certainly one should NOT rely on the invisible hand of the market and hope for the best.