Some noticeable things on a recent trip to Helsinki. €7 beer. Habour-fulls of motor yachts, including a little US$200k/day Vincentian domiciled charter (includes a skipper and a chef - bargain). Handsome and clean buildings of mostly Swedish influence (though there is no concealing the occasional Soviet inspired blot). And residential property prices as high as €15k/m2. In fact, the more one walks the heart (and monied part) of the city the more the apparent lack of economic distress becomes.
One of my Finnish acquaintances (central bank) explained it thus: the rich get richer, especially in a downturn. Another (high tech start-up) said out of Helsinki the picture was quite different and don't even ask about venture capital liquidity. And another (commercial property) said sentiment was now very high again amongst his investors.
This last view stuck with me for his firm is present in Sweden, Finland, Lithuania (claim to fame: we aren't Latvia) and Estonia (claim to fame: we aren't Lithuania).
Sweden has famously financed Baltic expansion and one of its main players in that game, Swedbank, is a now popular short (some background from the NYT here). Estonian GDP shrank nearly 17% in Q2 whilst retail sales fell 16%. Lithuanian GDP fell over 20% with retail sales dropping nearly 28%. Course Swedbank needs to raise capital to "strengthen" its "compeitive position".
Yet Baltic occupancy rates for my acquaintance's firm are high and steady. Moreover, rental agreements are denominated in euros in order to protect the landlord (theoretically) from devaluation. And with his debt maturities covered through 2010 all, it seems, is rosy.
However, there are not many ways back for Estonia and Lithuania other than through lower wages and prices (in order to boost exports and assuming they continue to protect creditor banks by not devaluing).
So some deterioration of these defiant retail property actuals, surely, approaches. And, for the broader economy, it is straightforward to see the linkages from stressed trading partners back to even the sensibly run Finnish banks and property companies - but not so easy to judge impact.
In the meantime in 'old' Helsinki (relatively speaking since there appears not to be a single stone edifice over 150 years old in the place), one of the few conspicuous signs of current stress is that of giveaway hotel prices (after a very gentle haggle). But they'll get you back on the liquor.