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Entry to homeownership among immigrants in the Helsinki Metropolitan Area

In Finland and in the Helsinki Metropolitan Area, immigrants live in owner-occupied housing far less frequently than the native population (e.g. Vaattovaara et al. 2010, 218–220, 253; Castaneda & Kauppinen 2015; City of Helsinki Urban Facts 2015). A corresponding mismatch can also be seen in many other countries, particularly with regard to immigrants who have been in the country for a short period of time.

In this article, we will examine the rate at which immigrants who moved to the Helsinki Metropolitan Area between 1991 and 2005 entered homeownership and the factors that usually precede this transition. The analysis is limited to immigrants born outside of Western countries [1].  The results presented here are based on the core findings of our article, which was published in the Housing Studies journal and covered the topic more extensively (Kauppinen & Vilkama 2016). We will also compare the situation in the Helsinki Metropolitan Area with observations made regarding entry into homeownership among immigrants in the Stockholm and Copenhagen regions.

Buying a home can be viewed as an indication of a stable financial situation. Thus, the differences between immigrants and the native-born population in terms of entry into homeownership can be explained simply based on disparities in financial resources and family situations, especially as we know that immigrants often have trouble finding employment (Eronen et al. 2014). However, studies conducted in a variety of countries have revealed that this explanation falls short of covering all the gaps found in the prevalence of homeownership. Furthermore, expenditures other than housing (e.g. money transfers to the native country, investments in business operations), religious obstacles to taking out an interest-bearing loan or hopes of returning to one's home country may reduce the rate of making the transition (Virtanen & Vilkama 2008; Skovgaard Nielsen et al. 2015). The money left over from day-to-day expenses may also be invested in building a house in the original homeland instead of purchasing a home in the new country of residence (Huttunen 2006). The discrimination experienced by immigrants may also have an impact. Alongside labour market discrimination affecting financial resources (Larja et al. 2012), this may be manifested as fewer possibilities for securing a housing loan, for example. However, no research findings related to this aspect in Finland are available. In countries and cities with a large population of a specific ethnic group, various peer assistance networks and housing agencies established by the minorities have often emerged to facilitate the entry into homeownership (e.g. Søholt 2001, 345–350; Texeira 2006, 127).

Research data

The research material was register data ordered from Statistics Finland (Agreement TK-52-1520-10), pertaining topersons between 18 and 49 years of age who moved to the Helsinki Metropolitan Area (Helsinki, Espoo, Vantaa, Kauniainen) from other parts of Finland or abroad. Housing tenure status within this group was monitored annually from the year of the move up to 2008 or the transition into homeownership. In other words, all the persons studied, including those born in Finland, had moved to the Metropolitan Area as adults. The register-based sample encompassed 23,063 Finnish-born people (10% sample) and 10,390 people born outside of Western countries (33% sample). The monitoring was discontinued before 2008 if the person in question moved outside the Uusimaa region or Finland. The research material covered only those who lived in Finland for at least two years after moving to the Helsinki Metropolitan Area.

The studied foreign-born immigrants were divided into six groups (see Figure 1). Among them, those who were born in the Soviet Union were included in the group for persons born in Russia. However, the group for immigrants born in Estonia included those born in Russia or the Soviet Union who were Estonian citizens or whose native language was Estonian upon moving to Finland. People who speak Finnish, Swedish or Sami were excluded from the foreign-born group, with the exception of Finnish-speaking persons born in Russia or Estonia. Finnish-born persons will hereinafter be referred to as the “native population".

This article’s considerations only included persons who did not move into owner-occupied housing immediately upon moving to the Helsinki Metropolitan Area. Of the Finnish-born 18–49-year-olds who moved to the Helsinki Metropolitan Area between 1991 and 2005, 22 per cent moved directly into owner-occupied housing. For those born elsewhere, the proportion varied between 12 and 21 per cent, depending on the group. Therefore, these groups are not included in this article’s considerations.

Clear differences in the rate of entry into homeownership

There are clear differences in the rate of entry into homeownership from other forms of housing between the native population and immigrants, on one hand, and between immigrant groups on the other hand. Figure 1 illustrates the proportional differences that these rates lead to over the course of 12 years of monitoring. In the figure, year 0 refers to the year of moving to the Helsinki Metropolitan Area.

Finnish-born immigrants made the transition to homeownership much faster than other groups: half of those who had originally lived in other housing moved into owner-occupied housing within seven years of migrating to the Helsinki Metropolitan Area (Figure 1). Among the immigrants, the fastest to enter homeownership were those born in Asia outside the Middle East. For them, the median duration was 11 years. The slowest to enter homeownership were those born in Sub-Saharan Africa. Among this group, moving to owner-occupied housing was so rare that in the 12 years of monitoring only 12 per cent made the transition [2].

In Figure 1, those who moved away from Finland (or to other locations in Finland) have affected the results up until the year preceding the year of the move. Yet the results are fairly descriptive of those who stayed in Finland for a longer period: the results are almost identical, if the criterion for years spent in the country is at least six years after moving to the Helsinki Metropolitan Area.

The results are closely aligned with those of Stockholm and Copenhagen (Kauppinen et al. 2015). The differences in the rate of entry into homeownership between the native population and non-western immigrants in the Copenhagen, Helsinki and Stockholm regions are very similar (when the local cooperative type bostadsrätt housing is also included as a form of owner-occupied housing in the Stockholm region).

Financial resources especially important for explaining the gaps

When examining the rate of entry into homeownership between the groups determined according to country of birth, the simplest explanation for the differences would be that the slowest groups are the ones most lacking in financial resources. In fact, the differences between the groups in terms of employment and income level would suggest this to be the case. A stable employment history is significantly rarer in all of the examined immigrant groups than among Finnish-born people; it is rarest among those born in Africa and the Middle East. Within these groups, the proportion of follow-up years in which an individual was employed for at least a second consecutive year was approximately one fourth, while it was much higher – two thirds – among the native population. Furthermore, a household’s average income level was much higher among the native population than immigrants. The lowest levels were found among those born in Africa and Asia. However, the employment and income level of Estonian-born immigrants was fairly high in relation to their slow transition into homeownership.

Table 1 shows the degrees to which the observed differences in entry into homeownership between immigrant groups and Finnish-born people can be explained by financial resources (employment and income level) and, more generally, by socio-demographic factors (the above-mentioned financial resources as well as age, gender, family situation, children [3]). This decomposition based on logistical regression analysis compares the average proportion of the Finnish-born people who entered homeownership in a single follow-up year (9.3 per cent) with the proportion predicted by the regression model if the Finnish-born group were given the same financial resources (or socio-demographic background) as in the immigrant groups. The difference between these proportions can be interpreted as the portion of the difference between the Finnish-born group and immigrant groups that can be explained by the differences in the backgrounds of these groups. In the table, this is indicated in the percentage points of the observed difference between the group.

Table 1 shows that, with the exception of those born in Estonia, the majority of the differences with the native population can be explained based on the differences in the socio-demographic background. Therefore, if the immigrant and Finnish-born groups were equal in terms of income, employment and family structure, the modelling indicates that the differences in entry into homeownership would be less than half of the observed differences.

The explained proportion is mostly linked to financial resources that explain 30–67 per cent of the difference found in the probability of entering homeownership. This explanation that hinges on financial resources is the least accurate for those born in Estonia; in other groups, more than half of the difference can be explained by the measured differences in financial resources. Demographic differences only help to explain the disparity between Estonians and Russians and those born in Finland, since these groups are older in terms of age structure.

The remaining gap to the native population is the largest with Estonians and those born in Sub-Saharan Africa. However, socio-demographic background factors fall short of explaining the full difference for any immigrant group.

When examining the links between the background factors and entry into homeownership, it is apparent that the household income level is much less likely to predict entry into homeownership among immigrants born outside the Western countries than among the Finnish-born group. In other words, higher income does not increase entry into homeownership as frequently among immigrants as the native population. By contrast, the connection between employment and the transition to homeownership is roughly at the same level. Among both the Finnish-born and immigrant groups, moving in with a spouse is an important factor increasing the likelihood of entering homeownership, but the birth of the firstborn child is the factor that increases the likelihood the mostamong the native population.

The connections between the background factors and entry into homeownership are very similar in the Stockholm and Copenhagen regions (Kauppinen et al. 2015). Among non-Western immigrants, income level is less likely to affect entry into homeownership (and least likely among those born in Africa and the Middle East in all three metropolitan areas), and changes in the family situation are less likely to influence the entry among non-Western immigrants than the native population.

Living in social rental housing is linked to a lower rate of entry into homeownership among both immigrants and the native population, but in the Helsinki region, this connection is stronger among immigrants (Kauppinen et al. 2015). When comparing the Nordic capitals, immigrants in the Helsinki region are particularly strongly concentrated in the social rental housing sector (Skifter Andersen et al. 2015). Despite this, non-Western immigrants are less likely to reside in disadvantaged neighbourhoods than in other Nordic capitals (Wessel et al. 2016). This may be due to the policy of social mixing that is implemented in the Helsinki region to balance the differences between neighbourhoods (Skifter Andersen et al. 2015).

The significance of having a Finnish spouse for entry into homeownership would be an interesting topic for a further study. This was not covered in the studies described here, but the data indicates that 30 per cent of non-Western immigrants who moved to owner-occupied housing did so in a year during which they were living with a Finnish-, Swedish- or Sami-speaking spouse (7 per cent of the moves took place specifically in the year when the persons moved in with their spouse). In other follow-up years, 16 per cent had a spouse who spoke Finnish, Swedish or Sami.


The results indicate a year-by-year increase in entry into homeownership among Finnish-born and other individuals who moved to the Helsinki Metropolitan Area between 1991 and 2005 (cf. Linnanmäki-Koskela & Niska 2010). However, considerable differences were found between the groups, with Finnish natives being faster to make the transition.

The majority of the disparities between immigrant groups and native Finns can be explained by the differences in socio-demographic structure, particularly in terms of financial resources. The significance of years spent in the country, which has been emphasised in previous international and Finnish studies (e.g. Linnanmäki-Koskela & Niska 2010), is likely to be mostly connected to an increase in financial resources.

The data used for the present study extends back to the 1990s when work-related immigration was less common than in the 2000s. Moreover, in the early 1990s, Finland was in the throes of a deep depression. These factors may partially explain why differences in financial resources account for such a large portion of the gap between immigrants and the native population in terms of entry into homeownership. The integration of immigrants into the labour market has been a challenge in Finland, which Sarvimäki (2011) links with the strict labour market regulation and the comprehensive social security system (see also Yijälä 2016).

That said, the differences in financial resources do not explain the full scope of the disparity, and income level is less likely to affect entry into homeownership among immigrants than the native population. Particularly with those born in Estonia and Sub-Saharan Africa, income level has little effect on the transition. As regards those born in Estonia, this may be due to the desire to maintain close ties to the original homeland, as a result of which some may choose to invest savings there instead of Finland. Also for immigrants born in Sub-Saharan Africa, approximately half of whom come from Somalia, the reason may be the habit of sending money back home, the impacts of discrimination, religious obstacles for taking out an interest-bearing loan or the possibility of eventually moving out of Finland.

The connection between social rental housing and a lower rate of entry into homeownership can be interpreted as an indication that social rental housing can be viewed as an alternative means for securing a stable housing situation (cf. Skovgaard Nielsen et al. 2015). From this standpoint, the social rental housing sector provides secure living conditions even in groups in which purchasing a home may be difficult. However, this benefit decreases or disappears altogether if the possibility to continue living in social rental housing is denied as the person’s income increases (Prime Minister's Office 2015).

If the society succeeds in improving the financial situation of immigrants by means of labour policy, for instance, such improvement can also serve to efficiently tear down many obstacles in their housing careers. This assumption seems reasonable on the basis of our research results. Since confidence in continued secure living lowers the threshold of entry into homeownership, many other factors, such as immigration policy and the general social climate, can impact the speed of entry into homeownership.


The study was conducted under the Nordic NODES research project (see Andersson et al. 2010; Nordic welfare states… 2016), which was funded by the NORFACE research project “Migration in Europe – Social, Economic, Cultural and Policy Dynamics."

(1) In this context, the term ‘Western countries’ refers to Western Europe (Europe not including Cold War era Eastern Bloc countries), America and Oceania. According to Kauppinen et al. (2015), Western immigrants enter homeownership nearly at the same rate as Finnish-born residents.

(2) The prior results of Linnanmäki-Koskela and Niska (2010) referred to smaller differences between groups, which may be connected to the immigrants who came to Finland between 1987 and 1993 being special in that they were among the first to arrive, the impact of selective emigration on the results of the study in question, or the fact that our study is limited to the Helsinki Metropolitan Area alone.

(3) The differences of monitoring periods between 1991 and 2008 have also been taken into account here.


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Hi Nice article, I as a successful highly skilled worker (senior software developer with 15 years of experience) who has recently shifted from India to Finland and working in a multinational company with good salary is facing problems to settle down. 1. We pay 1/3rd of our family earning after tax in renting a 1 bedroom apartment with a small kid with us. We wanted to buy an apartment in Finland but no bank is willing to give loan because of strict rules of having a PR ( it takes more than 4 years to get one(4 years is a big part and we will spend 48k). Even though our salary is capable of affording a loan, banks are not willing to. It would be nice if government or press highlights this concerns and it will help immigrants who are qualified professionals settle here. 2. My wife who is a qualified teacher in India for English language, has to complete masters and one year pedological courses to start teaching here. any other profession is not easy to adapt and it becomes very demotivating for them and a urge to go back intensifies. Thank you

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