Rent to be Owned
An article in the Finnish news today was the results of a survey and study that looked at the difference of home ownership between Finns and foreigners. And unsurprisingly, foreigners are lagging well behind. For example, in the middle-income brackets, most Finns own a home, but only one in five foreigners do - eighty percent are renting. But even in the affluent bracket at the top end, Finns are far more likely to own than rent, in comparison to their foreign counterparts. However, according to the study, most foreigners want to own a home and not rent
The study found that foreigners saw their living situations shaped by limited finances, insecure employment and Finnish immigration policy.
Demographic forecasts for Helsinki, Turku, Jyväskylä, Tampere and Oulu all rest heavily on growth in the foreign-language population. With most foreigners renting, this means urban housing markets will tilt steadily towards rental in the decades ahead.
As you can see, the article, although short and bare bones, predicts that nothing will change to improve the situation to own a home for foreigners, and instead, they will encourage Finns to have investment properties to rent to them instead.
As one of the home owning (not outright) foreigners in the country, I get why so many don't buy here because there is very little support and it seems harder to get a good deal on mortgages. When I bought my first place in Finland, a small apartment, I had to get approval from the body corporate to allow me to buy, because I was foreign. I was not some Russian oligarch trying to circumvent sanctions, just a guy looking to buy a place where I had lived and worked for five years, and had permanent residency.
And I was buying it half with my girlfriend.
It was a big step for me personally and a couple years later after we broke up, I bought my girlfriend out of it and it became mine - and mostly the bank's. A couple apartments and now a house later, and through a lot of struggle and a mass of work, I feel that I should be considered some kind of immigration success story of a kind, where someone comes from abroad (and from outside the EU) and makes a life here, and builds a family.
But I will never be Finnish.
Even if I did the citizenship and passed, I know I will never be considered a Finn and I will still face all of the same challenges that other foreigners face, where I don't look the same, don't talk the same, and don't have the same social capital that a Finn gets at birth. It doesn't matter what I do, or any other foreigner does, at the end of the day, we will be treated differently. It will be harder for us, more expensive, and take more effort to "be like a Finn" in the country. Even if we are making the country money.
But it is going to get interesting in the coming years because the only reason Finland and many other countries are growing, is because of immigration from countries that have more than the replacement birth rate. The birth rate in Finland has dropped from 2.72 births per woman (which is above replacement meaning the population is growing, to 1.26, which is well below the needed replacement rate of ~2.1 per woman.
And while everyone cries about all the foreigners coming into the country changing the culture and taking up air and the like, remember that the entire economy is built upon increasing growth, and that comes through increasing expenditure, which comes through increasing populations. It of course doesn't have to be this way, but that is the way it is set up currently. For instance, the population can keep shrinking and at some point, without building another house, every Finn could own two homes.
Though there would be no one to rent the other.
Australia is going through a housing crisis at the moment, with not enough housing for all the immigrants flooding in and taking up all the space apparently, but it has a very strong investment market for housing. If the immigrants stop, yes, housing prices will fall, but will people then be happy?
And for a little bit of context, the population per square kilometre in Finland is 18 people. In the US it is 37 people. And in Australia, it is.... 3.5 people. Yet, they are building houses like this.
The Australian Dream?
Where the fuck are you meant to have a barbie and play backyard cricket?
But you see, none of this is about making life better for people, improving wellbeing, or increasing the opportunity for everyone. It is about the economy. It is about maximising profits. It is about ROI. It is about squeezing the most out of people possible and crushing them until there is nothing left to give. Everyone - not just foreigners, locals too.
Immigrants are looking for a better life of some kind, but they are economic and political tools of the system. The governments don't care, the corporations don't care, they are just looking to maximise at any cost, whether that be to wellbeing, culture, or the health of the communities. And, the locals are being used as well, not only due to the profit maximisation, but as political vehicles of the various agendas looking to seize more power.
Changes in single-occupier households
FIN
AUS
USA
What is causing the housing shortages?
So much of the conversation is put on immigration these days, without really questioning that the only reason immigration exists, is because of lines on maps and mental constructs. In a different world in a galaxy far, far away, they might not give two shits about migration of people at all. It might be a natural part of the populations balancing to provide the "human" (galaxy far, far away remember) resources needed at the time and location. Or just because people want to move. Maybe, there are no immigrants there, because there are no imaginary borders.
Ownership is essential.
From an investment perspective, we should be looking to own what we think will go up in value. However, from a human perspective, ownership gives us skin in the game, plus a place in the community. A place to care for, a place to hang a hat, raise a family and be proud of in some way. We should be encouraging ownership of everything that makes a community strong, not selling our communities to the highest bidder looking to maximise their investment profits.
And that isn't just about housing.
But that is another, larger conversation again.
Taraz
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This is one of the things that helped transform the US into a global superpower. The US government encouraged immigration and immigrants had access to the same opportunities as the citizens. The immigrants contributed their qouta to the growth of the US economy and she soon became a great capitalist force. I think Finland has a thing or two to learn from that. Though I don't expect any changes in the Finnish policy on this issue but you did a good job of making a life for yourself amidst the difficulties.
The thing is, they would have to change their culture in order to do so - and apparently, everyone wants to hold on to their culture, no matter how fucked up it is.
I'm not opposed to people from other countries buying property in the US, but I do wish it was a little harder. We have all of these foreign corporations buying land which is not really helping anyone.
Perhaps the rule should be - you have to personally reside on the property for two years at least.
Yeah, that might be fair.
Although immigrants from many countries are now allowed to own homes and buy them, they have to face all the challenges that many foreigners face. It was only after reading this content that I learned that you are not a Finnish citizen. So, the life you are living as an immigrant, not a Finnish citizen, amidst many obstacles and challenges, is commendable. No matter how much income immigrants generate for the respective countries, their governments do not value it.
I don't speak the language well enough. I wouldn't pass the tests :)
You know, even in America and in one of the most liberal states in US we are treated differently. We are very successful immigrants, and today we bought our dream home. The listing agent who is making $50K on commissions from this sale refused to come out for the final walk through she is supposed to be doing! Instead she said to our agent that she can pick up the keys from her office and do it with us... This is Luxury housing segment... then imagine how immigrants that are buying regular homes or condominiums are treated...
Fuck! That is pathetic. It used to be they would be there with a bottle of champagne!
In the article, they said most immigrants rent on "the outskirts of town". The reason is that most Finns won't rent to them in the cities. When I first came here, I wanted to rent close to where I worked, in the city. I was told to "find a place in the outskirts". It took ages to secure a place and it wasn't until the showing agent was actually the owner, an old woman, that I was able to get the apartment.
That is terrible. It is much worse than in USA. I guess in US, it is much better in larger cities than small towns.
Small town they don't want to do business with you. I have never experienced before people refusing to basically take your money. And they finally did but only after putting up every obstacle they could, delaying the sale by almost three months and asking to show where the money came from tracing back to almost thirteen years!
I read about encouraging Finns to have investment properties to rent to foreigners and was like ahh that's like here, but not really as apparently a "lot" (I don't know how much, it might not actually be "a lot" percentage wise but 1% feels like "a lot" when the amount is more than one is used to dealing with) of Australian property (including farms) is sold to foreign investors, and seems that the "locals" over here will cry about that in one breath but then hold out for that sweet foreign investment dollar in the next because they "can get more money so it just makes sense" (as per usual this only applies when they personally will gain but nobody else should because it's wrong and bad for the country or something).
J and I are currently loathing potentially becoming part of a problem we want nothing to do with as with the way the local (and perhaps further) economy is geared, it seems our only viable option to actually have the resources for retirement is investment properties (the person we were talking to was basically explaining how we chain it to buy more which is what clients usually do, we turned out to be a tiny subset of exceedingly difficult clients who really, really, really don't want to do this and are deeply resentful of feeling forced into it, not blaming the people helping us navigate/investigate this disgusting system obviously), but at least heading that route opens up some other options that we didn't have access to previously.
I hate it.
One good outcome of that investigation though is that they were able to help us refinance our current mortgage to a bank with a much lower interest rate.
Is it a similar kind of situation there?
When we were looking to buy an REA was anxiously trying to tell us that 400sqm was a "big family-sized" block these days because that's just how it was (we just kept looking at them like it doesn't matter how loudly you scream it at people to try to make it true, you're objectively wrong and will always be objectively wrong and it will never be true, apparently now they're trying to say 200sqm is big).
And now two kids is a "large" family apparently O_O it was four when we started and may have come down to three as I seem to recall (perhaps inaccurately) getting a "large family supplement" for a while when I was getting Centrelink.
No one blames the sellers, do they? Blame the foreign investors looking for an ROI, but the sellers are looking for an ROI too. Governments, companies and private people alike.
I understand this well. The problem is in the economy and society we have built, is that it is either join them, or suffer greatly, and have your kids and their kids suffer also. It is pretty terrible. :/
Insane, isn't it?
For reference, we have a relatively standard sized block for a house, maybe a little bigger - and it is almost 1200sqm.
So even if every woman had a "large" family, it isn't enough to replace the population - without immigration. Falling populations might be a great thing - but not for the economy as it stands, or anyone invested in it.
Absolutely. I know that's what J was thinking when we bought our current place (his family are a LOT more concerned about money in property than mine, I just want to make a nice home and my parents are like yep get that and him and his parents are screaming about not "overcapitalising" and unable to cope with the fact that I literally don't care even though I probably "should" but that's the story of my existence), it was in an area planned for rezoning which kicked in a fair few years after we bought it. Was supposed to help us sell easier, did not.
Might help the kids or any grandkids once we're dead and gone I guess as I don't think we're going to try again in the foreseeable future.
Your block is a nice size :D Ours is 900sqm, could have got bigger further out but we didn't want to go too much further out (previously it was J's work that was the problem but now it's mine as he works from home and just goes to the office on days where they have particularly long meetings) and the rest of this location is pretty nice (most of the time).
Well it can adapt or die. We'll just adapt like we're doing and keep encouraging others to do likewise. My daughter's boyfriend trades crypto (including paying for stuff, there was one time where his dad was having trouble with the bank and asked him to please pay someone they knew in crypto as apparently they both do crypto and he would pay him back when the bank stopped being annoying, and I jokingly told my daughter she could definitely keep this one XD) and a lot of the young adults at work and the young adults we've been dealing with in our recent financial planning forays give even curmudgeonly old J hope, they're not as dumb as the average likes to pretend.
What you said about ownership giving people a place in the community really stood out to me. Renting might be easier in the short term, but owning gives stability and roots, which helps people feel they truly belong. It is sad that so many foreigners want to buy but face extra barriers. I think this will become a bigger issue as the population depends more and more on immigrants in the future.
The wish to own a home is something everyone shares, but it appears that foreign residents are often left out. I think this situation doesn't just influence individuals; it also affects the unity of the community.
For sure it does. Renting isn't yours, so the area, the community, the shops, the whatever, aren't part of "yours" either. It is constantly being transient.
The influx of migrants has also caused a serious housing shortage in Türkiye. House prices and rents have increased significantly. If migrants return to their countries peacefully, there will be an excess supply. House prices and rents will inevitably fall. People became wealthy because of rising house prices. This time, some will go bankrupt because of the decline.
It would be more reasonable for receiving countries to allow migration after certain conditions are met. More humane conditions await migrants.
It really shows just how broken our systems are when population growth is treated as the only path forward. If we are not able to adapt economies to stability instead of endless expansion, the same crises will just keep repeating itself. My future children might end up repeating the same comment on this blog
hmmmmmmmm. I was just looking at some condos online, in the philippines.. foreigners cant own land, but condos are ok.