Rental housing

Demand for rental housing remained strong in growth centres. Differences between regions are increasing and, in some regions, supply and demand are now in balance. As in previous years, the strongest demand focused on smaller apartments, that is, studios and one-bedroom apartments.

The financial occupancy rate remained at a good level, standing at 97.2 (97.5) per cent for the review period. At the end of the review period, 193 (472) apartments were vacant due to renovations. The tenant turnover rate, which includes internal transfers, increased slightly when compared to the corresponding period of the financial year 2015 and was 23.0 (20.4) per cent.

The average rent for the Group’s 30,734 (27,233) market-based rental apartments (Lumo) was 14.38 (13.74) per sq m per month during the review period, and EUR 14.48 (13.92) at period end. The average rent for Lumo apartments is increased by the renewal of the property portfolio due to strong investment activities. The corresponding figures for the 4,192 (13,666) apartments rented at cost price (VVO) was EUR 12.85 (12.72) during the review period and EUR 12.94 (12.80) at period end.

At the end of the review period, there were 13,958 (18,733) active applications. (Applications are active for three months.) The average number of active applications per rental agreement termination was 16.9 (19.7). A total of 39,063 (48,422) new rental housing applications were received during the review period. The change in the number of applications is related to the rapidly growing Lumo homenow.fi service in which customers can rent the apartment they want directly online without submitting an application. Lumo homenow.fi has convinced customers of its merits: more than 760 tenancy agreements have now been signed through the apartment rental service.

Thanks to successful rental control and our housing advisory service, the proportion of annual turnover from rental operations accounted for by rent receivables remained low and stood at 1.1 (1.2) per cent at the end of the review period.

VVO Group continues to apply overall rent without any separate additional charges, which is convenient for the customers. In nearly all of the Group’s apartments, the rent includes water and broadband Internet.

During the review period, the Group has decided to prohibit smoking on balconies in all new and future renovated properties. After the reform, smoking in these properties will only be allowed in designated areas. The first new and renovated properties with a ban on smoking on balconies will be completed in February 2017. The aim is to ensure healthy and comfortable living conditions for all tenants.