Hoivatilat operates in the care property market, which has seen rapid growth in Finland in recent years. Private sector service provision has increased in day care as well as other care segments as a result of trends such as the privatisation of public service provision and the growing popularity of service vouchers. The customer base of Hoivatilat mainly consists of day care and care service providers, whose business operations are characterised by a reluctance to commit capital in property investments. Due to often significant moisture and mould damage in schools and kindergartens located in older buildings, there is a need to renovate old buildings and build new properties.
THE TREND TOWARDS GEOGRAPHICAL CONCENTRATION
According to statistics by the World Bank, the urban population
of Finland accounted for approximately 84 per cent
of the total population in 2015. The five largest sub-regions
(Greater Helsinki, Tampere, Turku, Oulu, Jyväskylä) are
currently home to about half of all day care-aged children.
The country’s growth centres will continue to be the places
where population grows and the majority of new citizens
are born. The geographical concentration of the population,
along with urbanisation, creates strong demand and needs
for kindergartens, nursing homes and schools particularly
in growth centres.
According to Statistics Finland and Eurostat, the Finnish
population is among the fastest-ageing populations in
Europe, and the proportion of the over-75s is expected to
increase significantly by 2030. Hoivatilat estimates that in
order for municipalities to meet their statutory obligations,
the total capacity of assisted living facilities must be increased
by between 20,000 and 30,000 beds. In practice,
this would mean 1,000 new nursing homes and property
investments amounting to EUR 2–3 billion to satisfy the
need for 24/7 assisted living facilities alone.
INCREASING PUBLIC DEPT
The financial position of the public sector has weakened
over the last years. The ageing of the population presents
a permanent additional challenge to the balancing of public
finances, and leads to growth in pension, healthcare and
long-term care expenses. The cash flow of the municipal
sector’s operations and investments was negative in
2010–2015, which lead to increasing debts in municipalities.
The total debt of the Finnish municipal sector has
more than doubled over the past decade.
INCREASING POPULARITY OF SERVICE VOUCHERS
AND PERSONAL SERVICE BUDGETS
Genuine freedom of choice and the use of service
vouchers has increased steadily in social welfare and
health services and day care. Freedom of choice will increase
in all care segments. The current share of the private
sector in day-care services is just 15%.