Kokkola housing market stalls as industry projects promise new jobs

Kokkola’s housing market has remained frozen for four years as planned industrial investments raise expectations of new jobs and a possible housing shortage, Yle reports.

Only about half the usual number of homes is currently for sale in the city. The Etuovi housing website lists just over 400 properties, according to estimates.

Real estate agents say many homeowners are delaying sales, hoping that confirmed investment decisions will push up prices. New homes are also not being built because the risks are considered too high.

The aluminium plant planned by project company Arctial could bring thousands of workers to the Kokkola region during construction and employ about 1,500 people once completed. The company is expected to make an investment decision, worth about 4.7 billion euros, next year.

“About one-third of the people attending viewings come from outside Kokkola, so there is demand for the city. I am very afraid that a catastrophe is coming if 500 families move here. It is an impossible equation, because there are not enough homes for those numbers,” said Harri Palokas, sales director at OC Kiinteistönvälitys.

There are also not enough rental homes or hotels for travelling workers and people seeking monthly rentals, said Teija Tynkkinen, entrepreneur and marketing director at Kiinteistömaailma Kokkola. She said the shortage could push up the city’s already high rents.

A similar situation occurred last year in the neighbouring municipality of Kaustinen. Rents rose sharply when hundreds of workers arrived to build mining company Keliber’s processing plant. In some cases, tenants had to pay more than they would have in Helsinki.

Investors from outside Kokkola show interest

Real estate agents now receive several inquiries each week about the plant, as well as about the best time to buy or sell a home.

Niklas Mustonen, sales manager at OP Koti Kokkola, said investors have gradually become more active. Small flats are attracting buyers from outside the city as well as local investors.

“Deals have been concluded with buyers from the Tampere and Helsinki regions, among others. I do not know whether the buyers can even place Kokkola on a map of Finland. The city looks attractive as an investment in rental statistics, and that is enough,” Mustonen said.

Kokkola ranked as the fifth most attractive city for residential property investors this year in a ranking by the Finnish Landlords Association. Its position was boosted by favourable rental trends and housing prices that have held their ground.

Owners are waiting before selling

The city’s housing market is looking to next year for momentum in buying and selling decisions.

Transaction numbers and sales times have improved slightly from last year, although the trend is not visible at every real estate agency.

Palokas said sellers should not expect the sharp rise in prices that some are waiting for. Price changes in the Kokkola region have been limited to a few percentage points at most.

“There will be no lottery jackpot, although prices will certainly rise,” he said.

Real estate agents hope that the construction of new homes, which has been almost at a standstill for a long time, will resume. Attention is focused particularly on private construction companies, while builders and construction firms are waiting for the city of Kokkola to share the risk.