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International real estate

House Hunting in … Finland

As more people move into Finland’s capital and supply is finally catching up to demand, residents are seeing a ‘new Helsinki on the horizon.’

This four-bedroom, waterfront villa is on the Kallahdenniemi peninsula, a pastoral strip of land jutting into the Gulf of Finland in East Helsinki. The sloping, 0.8-acre property faces the water, with about 200 feet of private beach and a boat dock.

Designed by Woldemar Baeckman, a well-known Finnish architect, and built in 1964 for a wealthy factory owner, the two-story, 5,344-square-foot house was constructed with concrete and rock, with a flat roof and minimalist lines, and embodies the modern movement that swept Helsinki in the mid-20th century.

An eat-in kitchen, dining area and master suite are all upstairs, with polished wood floors. The master suite faces the water, with a door opening to a covered balcony that runs along the second floor.

The current owners renovated the kitchen, installing bright blue and orange cabinetry and a white-tile backsplash. A glass wall looks out to the water, and a door opens to the balcony.

Off the kitchen, a dining table with room for eight overlooks the double-height living room, reached by way of a curved metal-and-wood stairway.

The downstairs living space has floor-to-ceiling windows and includes an office space and dining area, with access to the stone terrace running the length of the house. A hallway leads to three additional bedrooms on the water side of the house and a home theater on the opposite side. The downstairs bedrooms share a bathroom.

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The main downstairs living space is open and airy, with a wall of windows, a seating area and access to the waterfront terrace.Credit...Vesa Laitinen for The New York Times

Beyond is a spa that has a lounge with a fireplace, a sauna, a soaking tub overlooking the water and a shower. The listing agents, Heidi Uotinen and Pia Silvennoinen, of the real estate agency Habita, said that it is common in Finland to go for a swim directly from the sauna.

A wooden stairway leads down to the beach. The dock, which extends into water about 16 feet deep, can accommodate a sizable boat, the agents said.

The wooded Kallahdenniemi peninsula is in the Vuosaari neighborhood, and much of it is conservation land, with pine forests and a coastal meadow. The sandy beaches are popular with locals. Central Helsinki is about 20 minutes away by car or boat. Shopping and other services are about a 10-minute drive. The nearest metro stop is about a mile away, and Helsinki-Vantaa airport is a 30-minute drive.

Some 1.5 million people live in the greater Helsinki metropolitan area, representing about 27 percent of Finland’s population, according to a recent property market report from KTI, a Finnish real estate research company.

The municipality of Helsinki, which includes peninsulas, islands and bays, is home to roughly 650,000 people, a population that is projected to grow significantly in coming decades. Helsinki has undergone a boom in new construction in recent years, with almost 9,000 new rental units under construction at the end of 2018, the KTI report said.

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The owners renovated the kitchen, installing brightly colored cabinetry and a white-tile backsplash. The windows look out to the water.Credit...Vesa Laitinen for The New York Times

The ballooning development is creating new districts that are attracting residents from neighboring cities and towns, said Kenneth Katter, a partner and sales agent at Snellman Sotheby’s International Realty, in Helsinki.

New flats in central Helsinki start at about 8,000 euros a square meter ($830 a square foot), and can sell for considerably more, he said. Most are organized as housing companies, in which buyers purchase shares. Detached villas and rowhouses are available only outside the city center, typically at least three to five miles away, he said.

“Helsinki is developing to become a denser kind of community with multiple city centers,” Mr. Katter said. “We have the old Helsinki and the new Helsinki on the horizon.”

The pace of development seems to be catching up with demand, as sales have slowed. According to data provided by Habita, residential sales in Helsinki have been fairly flat over the past year, declining by 1.2 percent, while the average price per square meter rose by 3.6 percent.

The average price per square meter for existing apartments in Helsinki was 5,342 euros a square meter ($550 a square foot) as of the third quarter of 2019, according to data from the Central Federation of Finnish Real Estate Agencies. For the metropolitan area as a whole, it was 4,703 euros a square meter ($490 a square foot).

Prices of the historic Art Nouveau-style houses in the heart of Helsinki are rising faster than the rest of the market, Ms. Silvennoinen said, pointing to high demand: “The time to sell these properties can be only from a few hours to a few days.”

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The sauna is lined in wood, with large windows.Credit...Vesa Laitinen for The New York Times
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A soaking tub in the sauna has casement windows that open out to the shoreline.Credit...Vesa Laitinen for The New York Times

Foreign buyers have traditionally made up a small share of the market in Finland. The percentage of foreigners in the Finnish population, in fact, is among the lowest in the European Union, according to KTI, although it has increased in recent years.

About a quarter of Sotheby’s business there is driven by buyers who have dual nationality or are from outside the country, Mr. Katter said, although they usually have a family or business connection to Finland. Foreign buyers tend to be a mix of Europeans, Russians, Asians and the occasional American, he said.

Most of Habita’s foreign buyers are from Central Europe and Russia, Ms. Uotinen said.

Approximately half of all residential sales in Finland are sales of shares in housing companies, which are basically the equivalent of housing cooperatives, said Maria-Elena Ehrnrooth, the managing director of the Central Federation of Finnish Real Estate Agencies. Buyers and sellers don’t usually use a real estate agent in these transactions, she said, because the sales are fairly straightforward.

Agents are more commonly involved in sales of detached houses on private land, but not always. The commission, about 3 to 4 percent, is paid by the seller. Lawyers are not typically hired to handle transactions, Mr. Katter said.

In March, the Finnish government passed legislation requiring potential buyers from outside the European Union to apply to the Ministry of Defence for permission to buy property in Finland. (Permission is not required to buy housing shares.) Beginning on Jan. 1, 2020, information must be provided about the buyer and seller, as well as the intended use of the property. According to the Ministry of Defence, the process will take about three months and require a fee, to be “confirmed at the end of 2019.”

Mortgages are available to foreign buyers, but most banks in Finland have strict qualification requirements, said Antti Karanko, a senior associate with Merilampi Attorneys, in Helsinki.

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A private pier extends into water about 16 feet deep and can accommodate a sizable boat.Credit...Vesa Laitinen for The New York Times

Finnish and Swedish; euro (1 euro = $1.12)

The transfer tax in Finland is 2 percent for housing shares and 4 percent for property, Ms. Ehrnrooth said.

The annual property tax on this home is 1,642 euros ($1,830), the agents said.

Heidi Uotinen and Pia Silvennoinen, Habita, 011-358-50-420-0012; habita.com

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