Social housing and market rate rental price development in Finland between 2005-2023

Abstract

This study examines the rental price differences between ARA-subsidized social housing and market-rate housing in Finland from 2005 to 2023. The study investi-gates whether the price gap has widened, narrowed, or remained consistent over time and analyses the correlation between the price difference and inflation. Additionally, the research compares the development of rental prices across different cities and housing types, emphasizing regional and structural differences in the housing market. The used data is from statistics Finland, and it consists of 9 large cities across Fin-land.

When considering inflation, as well as the pricing impact of apartment size and re-gion, the findings indicate that the rental price gaps between ARA-subsidized and market-rate apartments have steadily increased across Finland during the review pe-riod. The gaps are most pronounced in smaller apartments, particularly studios. Re-gionally, the price gap is more significant in Helsinki and the capital region compared to other parts of Finland. The rise in inflation has contributed to the growth of the rental price gap, especially in the largest cities. The price difference seems to be con-sistently larger in smaller apartments.