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3. Changes in prices of dwellings and in earnings level

The price development of dwellings has varied much within the last 40 years or so. During the overheating of the housing market, prices rose by over 40 per cent in the last quarter of 1988 compared with the previous year. Correspondingly, during the recession of the early 1990s, prices of dwellings fell by as much as 20 per cent from the year before. From 1996 dwelling prices rose up to the middle of the year 2008, with the exception of the year 2001. The outbreak of the international financial crisis in autumn 2008 slowed down the housing market and prices fell by five per cent from the third quarter of 2008 until the first quarter of 2009. From the middle of 2009 onwards, prices of dwellings have continued to grow again. The rise in dwelling prices has clearly slowed down from year 2011 and in 2014, the prices of dwellings made a downturn.

Over the same time period changes in wages and salaries have been more moderate than changes on the housing market, except for the mid-1970s, when the earnings level rose by over 20 per cent per year due to the great inflation. Over the 2000s wages and salaries have gone up yearly by an average of 3.5 per cent. The average annual rise in prices of dwellings has been about 0.5 percentage point faster, which has undermined the purchasing power of wages and salaries on the housing markets.

Figure 3. Year-on-year changes in prices of dwellings and in wages and salaries 1971–2015, 1st quarter

Source: Prices of dwellings in housing companies, Statistics Finland

Inquiries: Petri Kettunen 029 551 3558, Jaana Hellman 029 551 2661, asuminen.hinnat@stat.fi

Director in charge: Mari Ylä-Jarkko

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Updated 29.4.2015