Abstract

Finland is a sparsely populated Nordic country with the fifth largest surface area in the European Union but a population of only 5.6 million. Population development is increasingly centred to the Greater Helsinki region and other growth centres, leaving empty dwellings and buildings in declining areas for which buyers can no longer be found and resulting in decreasing house prices. For the commercial property market, there are no official statistics yet, but efforts towards producing commercial property price indices have been made at Statistics Finland. This paper describes the measures taken and analyses the results achieved in two EU-funded projects, which have resulted in creating transaction-based hedonic indices for offices, retail premises and rental housing. Among the issues discussed are i) utilising data sources that cover four different types of property transfers in Finland, ii) dealing with a low number of observations, iii) challenges that arise from both portfolio sales and share deals. Compiling a CPPI for Finland in a condition of extremely low transaction numbers means difficult decisions concerning regional stratification, timeliness and adequate quality adjustment. Especially indices for retail premises and offices remain quite volatile despite all the efforts made.