Databank

Workreport 1997-48

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Name:

Selvitys kiinteistöjen hintakehityksestä Loviisan alueella

Writer:

Hannu Ridell; Satu Raak

Language:

Finnish

Page count:

42

Summary:

Working report: STUDY OF THE REAL ESTATE PRICE DEVELOPMENT IN LOVIISA
AREA


ABSTRACT

The objective of the study is to examine how real estate and partly also
apartment prices developed in Loviisa during the planning, construction and
usage periods of Loviisa nuclear power plant in 1964-1997. The study is
closely related to the planning of the environmental impact assessment (EIA)
program. The particular project for the EIA procedure is the final disposal of
spent nuclear fuel of the Loviisa and Olkiluoto power plants in the Finnish
bedrock. The focus of the study has been on the average prices and price
development of the unbuilt single-family house lots. The characteristics of
individual transactions such as location were not part of the study. In addition
the average prices and price development of the unbuilt coast line lots and old
apartments have also been examined in the extend of available information.

The city of Loviisa had an essential role in the single-family house lot market
in Loviisa during the whole examined period. Only 15 % of all single-family
house lot transactions had been made by the private sector. In practice the
Loviisa city has determined a certain basic price level for the single-family
house lot market including the private prices. The prices of the single-family
house lots sold by the Loviisa city increased along with the general cost
development in the examined period excluding the temporary price increase in
the beginning of the 1990’s. In practice the Loviisa city’s price level and the
price development of single-family house lots in Loviisa corresponded with
the price levels and price development of similar cities in Finland. In addition
to Loviisa the price levels of single-family house lots were also studied in
Tammisaari, Forssa and Helsinki.

The single-family house lot prices of the private sector in Loviisa varied more
than the prices of the Loviisa city during the examined period. In the middle of
the 1960’s the prices in private sector were slightly higher compared to the
Loviisa city’s average prices. The price increase mentioned continued until
1982. During 1983-1985 the prices of the single-family house lots in the
private sector decreased to the same level with the Loviisa city’s prices in
which level the prices stayed until the end of the 1980’s excluding few
occasions. The amount of the transactions of the single-family house lots was
about 1-8 yearly. However in the 1990’s the price development of single-
family house lots was fairly on unbalanced stage and also the number of the
transactions in the late 1990’s was yearly only few.

The Loviisa city sublets in practice most of the vacation lots located on the
coast. As the available price information of the vacation lots sold in Loviisa is
rather non-existent the assessment of the price development was not possible.
Due to this reason the unbuilt vacation lot market was studied in the Pernaja
district area located on the west side of Loviisa city and also in Tammisaari.
The square prices of the vacation lots located on the coast in Pernaja and
Tammisaari developed rather uniformly from the 1960’s up to the 1980’s. In
the 1990’s the yearly price development has fluctuated greatly and in practice
the variation represents the confused situation of the vacation lot market in the
depression years.

The old apartment prices in Loviisa were studied only from the 1980’s since
there were available no proper information of apartment prices before the year
1982. There were not seen any great differences in the average price level and
price development of the old apartments between Loviisa and the comparison
cities located in the Southern Finland.

The strong price increase of the single-family house lots sold by the private
parties in Loviisa can partly be interpreted by the wide migration movement in
Finland in the 1960’s and in the beginning of the 1970’s and partly by the busy
construction activity in Loviisa in the 1970’s. In addition to building dwelling-
houses other type of construction is also included into the construction activity
such as the Loviisa nuclear power plant. On the other hand the negative
migration into Loviisa and fading construction activity had partly effect on the
land market decreasing the price level of the single-family house lots in the
private sector between 1982-1985. In the late 1980’s the prices of the single-
family house lots of the private parties in Loviisa stayed pretty much on the
same level and the prices corresponded with the Loviisa city’s price level. The
price increase in the beginning of the 1990’s in Loviisa was due to a decision
made by the Loviisa town council. The decision to increase the prices of the
single-family house lots was based on the general price increase of apartments
and real estates in Finland in the late 1980’s rather than recovery in the
construction activity, decrease in the unemployment or positive migration into
Loviisa. However the price increase of the single-family house lots sold by the
Loviisa city also effected the private prices increasing them as well in the early
1990’s. The price increase remained temporary due to the low demand in the
depression years.

The construction stage of the Loviisa nuclear power plant and the settlement of
the employees with they families into Loviisa essentially interprets the strong
migration into the city and strong construction activity in Loviisa in the
1970’s. During that time there can be seen a price increase of the single-family
lots sold by the private parties as on the other hand the Loviisa city’s prices
followed the general cost development. Respectively the negative migration
and growing unemployment in the beginning of the 1980’s explain the price
decrease of single-family lots in the private sector particularly in 1983-1985.
At the same time the money market tightened in the whole country. One of the
reasons for the strong negative migration from Loviisa in the end of the 1970’s
is that the construction workers of the nuclear power plant left Loviisa which
then partly had a negative effect on construction activity and unemployment in
Loviisa in the beginning of the 1980’s. Based on the survey there are however
not seen price increase or decrease in Loviisa and its surroundings that are
directly and fully caused by the preparation, planning, construction and use of
the Loviisa nuclear power plant in 1964-1997. The Loviisa nuclear power
plant seems to have effected the average price development of the Loviisa area
indirectly especially through migration and employment situation in the 1970’s
and 1980’s. The development of price levels in Loviisa does not differ
significantly from the price development in similar cities.

The effect of the Loviisa nuclear power plant to real estate prices locating
within the range of vision from the power plant was not studied. However it is
likely that vision distance to a power plant as well as to a harbour and a power
line decreases the demand and the prices of such real estates.

KEY WORDS: Single-family house lot prices, vacation house lot prices,
apartment prices, price level, price development.
STUDY OF THE REAL ESTATE PRICE DEVELOPMENT IN LOVIISA
AREA


ABSTRACT

The objective of the study is to examine how real estate and partly also
apartment prices developed in Loviisa during the planning, construction and
usage periods of Loviisa nuclear power plant in 1964-1997. The study is
closely related to the planning of the environmental impact assessment (EIA)
program. The particular project for the EIA procedure is the final disposal of
spent nuclear fuel of the Loviisa and Olkiluoto power plants in the Finnish
bedrock. The focus of the study has been on the average prices and price
development of the unbuilt single-family house lots. The characteristics of
individual transactions such as location were not part of the study. In addition
the average prices and price development of the unbuilt coast line lots and old
apartments have also been examined in the extend of available information.

The city of Loviisa had an essential role in the single-family house lot market
in Loviisa during the whole examined period. Only 15 % of all single-family
house lot transactions had been made by the private sector. In practice the
Loviisa city has determined a certain basic price level for the single-family
house lot market including the private prices. The prices of the single-family
house lots sold by the Loviisa city increased along with the general cost
development in the examined period excluding the temporary price increase in
the beginning of the 1990’s. In practice the Loviisa city’s price level and the
price development of single-family house lots in Loviisa corresponded with
the price levels and price development of similar cities in Finland. In addition
to Loviisa the price levels of single-family house lots were also studied in
Tammisaari, Forssa and Helsinki.

The single-family house lot prices of the private sector in Loviisa varied more
than the prices of the Loviisa city during the examined period. In the middle of
the 1960’s the prices in private sector were slightly higher compared to the
Loviisa city’s average prices. The price increase mentioned continued until
1982. During 1983-1985 the prices of the single-family house lots in the
private sector decreased to the same level with the Loviisa city’s prices in
which level the prices stayed until the end of the 1980’s excluding few
occasions. The amount of the transactions of the single-family house lots was
about 1-8 yearly. However in the 1990’s the price development of single-
family house lots was fairly on unbalanced stage and also the number of the
transactions in the late 1990’s was yearly only few.

The Loviisa city sublets in practice most of the vacation lots located on the
coast. As the available price information of the vacation lots sold in Loviisa is
rather non-existent the assessment of the price development was not possible.
Due to this reason the unbuilt vacation lot market was studied in the Pernaja
district area located on the west side of Loviisa city and also in Tammisaari.
The square prices of the vacation lots located on the coast in Pernaja and
Tammisaari developed rather uniformly from the 1960’s up to the 1980’s. In
the 1990’s the yearly price development has fluctuated greatly and in practice
the variation represents the confused situation of the vacation lot market in the
depression years.

The old apartment prices in Loviisa were studied only from the 1980’s since
there were available no proper information of apartment prices before the year
1982. There were not seen any great differences in the average price level and
price development of the old apartments between Loviisa and the comparison
cities located in the Southern Finland.

The strong price increase of the single-family house lots sold by the private
parties in Loviisa can partly be interpreted by the wide migration movement in
Finland in the 1960’s and in the beginning of the 1970’s and partly by the busy
construction activity in Loviisa in the 1970’s. In addition to building dwelling-
houses other type of construction is also included into the construction activity
such as the Loviisa nuclear power plant. On the other hand the negative
migration into Loviisa and fading construction activity had partly effect on the
land market decreasing the price level of the single-family house lots in the
private sector between 1982-1985. In the late 1980’s the prices of the single-
family house lots of the private parties in Loviisa stayed pretty much on the
same level and the prices corresponded with the Loviisa city’s price level. The
price increase in the beginning of the 1990’s in Loviisa was due to a decision
made by the Loviisa town council. The decision to increase the prices of the
single-family house lots was based on the general price increase of apartments
and real estates in Finland in the late 1980’s rather than recovery in the
construction activity, decrease in the unemployment or positive migration into
Loviisa. However the price increase of the single-family house lots sold by the
Loviisa city also effected the private prices increasing them as well in the early
1990’s. The price increase remained temporary due to the low demand in the
depression years.

The construction stage of the Loviisa nuclear power plant and the settlement of
the employees with they families into Loviisa essentially interprets the strong
migration into the city and strong construction activity in Loviisa in the
1970’s. During that time there can be seen a price increase of the single-family
lots sold by the private parties as on the other hand the Loviisa city’s prices
followed the general cost development. Respectively the negative migration
and growing unemployment in the beginning of the 1980’s explain the price
decrease of single-family lots in the private sector particularly in 1983-1985.
At the same time the money market tightened in the whole country. One of the
reasons for the strong negative migration from Loviisa in the end of the 1970’s
is that the construction workers of the nuclear power plant left Loviisa which
then partly had a negative effect on construction activity and unemployment in
Loviisa in the beginning of the 1980’s. Based on the survey there are however
not seen price increase or decrease in Loviisa and its surroundings that are
directly and fully caused by the preparation, planning, construction and use of
the Loviisa nuclear power plant in 1964-1997. The Loviisa nuclear power
plant seems to have effected the average price development of the Loviisa area
indirectly especially through migration and employment situation in the 1970’s
and 1980’s. The development of price levels in Loviisa does not differ
significantly from the price development in similar cities.

The effect of the Loviisa nuclear power plant to real estate prices locating
within the range of vision from the power plant was not studied. However it is
likely that vision distance to a power plant as well as to a harbour and a power
line decreases the demand and the prices of such real estates.

KEY WORDS: Single-family house lot prices, vacation house lot prices,
apartment prices, price level, price development.

Keywords:

Omakotitonttien hinnat; lomatonttien hinnat; asuinhuoneistojen hinnat; hintataso; hintojen kehitys

File(s):

Selvitys kiinteistöjen hintakehityksestä Loviisan alueella (pdf) (867.4 KB)


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