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Don't miss the wood for the trees!

Stefan Wundrak

Stefan Wundrak, Head of European Research, explains why the Nordics is such a curious region for real estate investors.

Geographically, the four countries Sweden, Denmark, Norway and Finland are more than five times the size of France, but with only 26 million people, they have less than half the population of France. With a c.10 million population, Sweden is by far the biggest country in the region; the other three adding about fve million each. The entire region is very affluent, but Norway’s oil wealth puts it in another league. GDP per capita is more than double that of Germany and more than three times that of Italy. Only the Finns are as “poor” as the Germans on a per capita basis. 

Denmark is the only fairly densely populated country, with about 125 people per km2 (not counting Greenland), which is similar to Portugal or Poland. Norway, on the other hand, spreads just 13 people per km2, the same as Saudi Arabia, which is almost entirely desert.

This unusual geographical structure makes the region an interesting case study for regional economic growth patterns. The map below shows population growth across regions and the largest cities in each country. As Northern Scandinavia lies at the periphery of Europe, and is characterised by a harsh climate, the larger urban areas tend to be in the south of each country and near the more accessible coast. The exception is Denmark, which is located entirely in the south.

These urban areas are substantially more affluent than their respective countries. By way of example, retail spending in Helsinki is 40 times that of the regions of Kainuu or Lapland in the North of Finland. To be fair, there is not a single shopping centre in Kainuu for the locals to spend their money (Kainuu’s coat of arms just shows a line of trees and Lapland’s exhibits a grim looking man with a club!). Quite clearly, the more urbanised areas continue to experience the strongest population growth. Stockholm’s population is expected to swell by 10% by 2025, whereas the rest of Sweden would see population growth of just 4%. This pattern of growing urbanisation is a global phenomenon and underpins our initiative to focus on city-based strategies instead of countries.

It is worth mentioning that the Nordics stand out in Europe. The spill over effects (eg. via government redistribution) of affluence and growth into the regions are so powerful, that even remote areas look strong on a pan-European comparison. Tree rich Kainuu will deliver positive spending growth over the coming years, which cannot be said about every part of Europe. And the North of Norway, located at the very periphery of Europe, beats the richest region in Germany on per capita income. 

Nordic population change 2015-2025 (%)


Source: CBRE, 2015

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Stefan Wundrak

Stefan Wundrak

Head of European Research

Stefan's biography