[hiAndrewQuinn]

Ooh, as an American involved lightly in real estate who relocated to Suomi a few years ago I always love this topic. Let me ramble.

It's worth pointing out that, on a country-wide level, Finnish housing prices have been remarkably stagnant for the last 20-30 years when compared to e.g. the United States or most other European countries. That is not true of the cities, obviously, and cities are where all the work is, but it is quite possible here to find very cheap housing in the "middle of nowhere".

Government subsidies don't change that dramatically between these different areas, so it's entirely possible to rent e.g. a studio apartment someplace like Kemi or Vaasa for 500€/month or lower and then just coast if you are willing to put in some effort. If you're willing to live with roommates, who may well be running the same strategy you are, it becomes even easier. (The downside is you then have to live there. Many of these areas have record high unemployment rates, for much the same reasons 3000 person towns in the United States do. Having done something like that for a year, I can report it felt like living in cryostasis.)

So there's arguably an oversupply of Finnish housing in these remote areas, and most of the country is correctly classified as remote (seriously, look at a map, Finland is huge for 5 million people). One interesting mechanism which might help curb that oversupply in the coming decades is the 15% inheritance tax - many people who live in these areas are older and don't want to hand down e.g. a $50,000 valuation home to their kids and then force them to somehow pony up 7.5k in liquid capital. That incentivizes them to sell sooner rather than later.

The more interesting question: Has Finnish housing supply growth in areas like Helsinki, Tampere and Turku kept up with demand growth? I suspect that no matter which country we're looking at, the one which answers that correctly today for their largest cities will be the best place overall to live 10 or 20 years from now. Personally I'll always prefer Finland's massive concrete suburbs to the endless, pointless sea of single family homes I grew up in in the States, and I hope we keep building more of them!

[ghaff]

A lot of that probably applies to the US as well. There's no shortage of relatively inexpensive housing but a lot of people just don't want to live in those places for a variety of reasons. Ask a lot of the people here: it's cold and snows, it's not welcoming to people like me, there aren't a lot of good local jobs, there's a lot of crime...

[gottorf]

> there's a lot of crime

This is maybe the biggest difference between America and other developed countries when it comes to this subject. You'll find that a fifth-percentile priced home in Spain, Korea, or Australia will be in a rural area with not a lot of economic prospects, but in the US you'll have the additional burden of finding a meth lab next door or being a homicide victim.

[ghaff]

In the US, it's probably more about being in a bad area of Detroit (or even cities that are considered much more elite) than being rural with a meth lab next door but I don't really disagree with your basic point though I'd have to look at the actual stats. Not sure that US rural areas in general have a big crime problem relative to areas of some cities.

[gottorf]

Yeah, you're probably right. To restate my point, it's that buying a cheap house in the US comes with risks to one's basic safety that you don't find in other developed countries.

[ghaff]

Although I'm not sure that's true in general outside of bad areas of cities--which do also exist in other developed countries. Maybe some rural areas are iffy but many inexpensive ones are really not.

[dyauspitr]

There is plenty of cheap rural housing in places without a lot of crime in the US. The other problems still hold however.

[ghaff]

Yeah. In that case, I was thinking more about cheaper housing in especially 2nd/3rd tier cities. Rural areas are, in general, fairly safe.

[FpUser]

>"One interesting mechanism which might help curb that oversupply in the coming decades is the 15% inheritance tax"

Housing is one of the areas I do not see any problems with oversupply.

[hiAndrewQuinn]

To be precise, "oversupply" here means "supply which has not yet reached the market clearing price". You could theoretically cause San Francisco to have an oversupply of housing if you waved a magic wand and made everyone selling their homes right now double their prices, but they would probably fall back to the natural equilibrium. Or, if they didn't, and those homes actually sold, you could describe the current situation as undersupplied.

Oversupply is almost definitionally a bad thing because it means 10 families are trying and falling to offload their $20,000 home for $80,000, and for whatever reason none of them are willing to lower their price to the sane level. That's an obvious market failure, even if its causes aren't well understood. And when I say "curb the oversupply" I actually mean "put or rent these properties on the market at prices where they will actually get used."

[worik]

> To be precise, "oversupply" here means "supply which has not yet reached the market clearing price".

That is true for consumer goods where demand can shift to substitutions easily

It is not true for infrastructure goods such as housing. (Housing is infrastructure)

There is a measurable need that can be under or over supplied.

[hiAndrewQuinn]

That claim is just false. No one needs to live at exactly 123 Acorn Street, Pierre, South Dakota, USA.

They may have good reasons to want to live there, including "My job is here", "My family is here", and "The only doctor in the world who can treat my exceptionally rare illness lives here". But God will not smite them if USPS starts delivering their mail to a different address. They have many options for figuring out a different place to live, either locally in Pierre, or farther away in a different state or continent.

The fact that the supply and demand curves seemingly move slower in the housing market compared to e.g. the electricity or food markets, which are arguably much more basic "infrastructure goods" (you can survive being homeless if you have food - you can't survive living in a mansion with nothing to eat), doesn't mean they stop being subject to the laws of supply and demand. At worst it means "Plan carefully, because if you miss the mark you will lose a lot of money for a long time." At best it means "Sweet - I wonder if I can make these markets more dynamic with a new company?"

[lotsofpulp]

Pushing and pulling water/sewer/gas/trash/food/electricity/fiber/police/ambulances/healthcare long distances is not cheap.

Typically, “housing” implies those amenities nearby. Obviously, a little bit extra doesn’t hurt, but building out and maintaining infrastructure is not cheap.

I imagine the calculations get even tougher when 50 year projections are for smaller populations.

[euroderf]

> the "middle of nowhere".

*"snow-where"

That being said, yes Helsinki has been a magnet for employment at least since the Nokia boom years, but its population has ebbed at least once in lulls since then when rental demand cannot meet overpriced supply.

Outlying regions do have a big overstock of housing. Even with low rents, I don't think you can keep any even moderately ambitious young person out in the sticks and away from Helsinki/Tampere/Oulu. Long ago one might think that maybe the country's policy of universal high-speed internet coverage might counter that tendency, but... no.

FWIW some stats on population age by region here: https://www.statista.com/statistics/529458/average-age-of-po...

[vintermann]

They say that in rural Norway, a new house loses half its value when you turn the key. Some municipalities build houses at a loss to try to attract young families.