Outlook for 2016

Market outlook

Although the Finnish economy is resuming growth, economic growth in Finland in 2016 is expected to remain slower compared with the rest of the euro zone. Growth is based on household consumption and construction. The outlook for the Finnish economy is influenced by factors such as weak exports, the structural change in industry, the decreased cost competitiveness and the contraction in the number of working-age population. The outlook for employment is weak. General interest rates are forecast to remain low.

Demand for rental housing is expected to remain strong in major growth centres. Differences between regions are increasing and, in some regions, supply and demand are now in balance. New development is expected to continue focusing on privately financed rental apartments.

Price trends in owner-occupied apartments are expected to continue to be stable. A rise is expected in the prices of small, centrally located apartments. The prices of large apartments on the outskirts may fall slightly.

Outlook for VVO Group

VVO Group specifies its outlook for 2016 with regard to investments.

VVO Group estimates that net rental income will remain at the 2015 level. Investments are forecast to be approximately EUR 650 million (previous estimate: over EUR 600 million). The outlook takes into account the effects of the divestment of 8,571 apartments and the acquisition of 2,274 apartments, the estimated occupancy rate for the remainder of the year and the number of apartments under construction. VVO Group’s financial occupancy rate is expected to remain at the current level throughout 2016, due to continuing stable demand for rental housing. The estimate is based on currently valid tenancy agreements and the stable demand in growth centres.