Finland’s residential property market is gradually stabilising after a challenging period, with home sales showing steady improvement. However, property prices remain weak as a large number of unsold homes and cautious buyer sentiment continue to slow the pace of recovery.
Recent data from Statistics Finland indicates that although transaction activity has picked up, price growth has not yet followed. The market is currently characterised by higher sales volumes but limited upward pressure on property values.
Apartment Prices Continue to Face Pressure
By the end of 2025, the average price of second-hand apartments in Finland stood at approximately €2,487 per square metre, reflecting a decline of nearly 3% year-on-year.
Newly built apartments performed slightly better during the same period. The average price of new units rose around 2.8% annually, reaching roughly €5,093 per square metre.
The divergence suggests that while demand is slowly returning to the market, excess supply in the resale segment continues to weigh on price growth.
High Inventory Levels Impact Market Dynamics
Despite a sharp slowdown in new construction, the resale market is still absorbing a backlog of homes that were listed during the recent downturn.
This surplus inventory has increased selling times and widened the gap between listing prices and final transaction values. Buyers currently have significant negotiating power, often leading sellers to accept lower offers—especially in urban growth centres where housing supply remains elevated.
Financial institutions and analysts describe the housing market as stable but cautious, noting that improved transaction activity has not yet translated into sustained price appreciation.
Economic factors also continue to influence buyer behaviour. Finland’s economic recovery has been gradual, and concerns around employment and household finances are keeping many potential buyers cautious. Although borrowing costs have eased compared to their 2023 peak, affordability concerns remain.
Regional Price Differences Persist
Property prices continue to vary widely across regions, with Helsinki and the surrounding metropolitan area maintaining the highest housing values.
In the fourth quarter of 2025, second-hand apartments in Helsinki averaged more than €4,400 per square metre, representing a year-on-year decline of slightly over 3%.
Outside the capital region, housing prices remain significantly lower, typically ranging between €1,700 and €2,700 per square metre, depending on location and property type.
Some regions have seen relatively stronger performance in the new-build segment, partly due to reduced construction activity limiting fresh supply.
Gradual Price Recovery Expected
Looking ahead, financial institutions anticipate modest improvements in the housing market over the next two years.
Forecasts suggest property prices may increase by 1–1.5% in 2026, followed by growth of approximately 2–2.5% in 2027. However, the recovery is expected to remain uneven across regions and housing categories.
Much will depend on how quickly excess housing inventory is absorbed and whether consumer confidence improves as economic conditions stabilise.
Housing Transactions Are Rising Again
Property transactions in Finland showed clear signs of improvement during 2025. Nationwide, just over 58,000 residential transactions were recorded, representing an increase of more than 10% compared to 2024.
Despite the improvement, transaction volumes remain below pre-pandemic levels.
Most of the activity occurred in the resale segment, with used homes accounting for roughly 97% of total transactions. Sales of newly constructed homes declined significantly during the year.
Buyers appear to prefer existing homes due to their lower prices and faster availability, while new developments—often priced at a premium—have faced slower demand.
Major cities such as Espoo, Tampere, and Oulu reported stronger year-on-year growth in housing transactions, while Jyväskylä was one of the few major cities to record a decline.
Analysts expect transaction volumes to exceed 60,000 in 2026, signalling further normalisation of the market.
Housing Construction Remains Weak
On the supply side, Finland’s construction sector continues to face a significant slowdown.
Housing starts declined by more than 9% in 2025, with fewer than 16,500 new residential units launched during the year. Housing completions also fell by around 7.5%.
Building permits—an indicator of future construction activity—dropped nearly 16% year-on-year, suggesting that a strong rebound in new housing development may take time.
The downturn has been particularly pronounced in privately financed housing projects. A large portion of current construction activity is now focused on publicly subsidised housing developments.
While construction activity is expected to begin improving gradually in 2026, it will likely remain well below the levels seen during the housing boom of 2021–2022.
Industry groups warn that if construction remains subdued for an extended period, housing shortages could emerge in rapidly growing urban areas once demand fully recovers.
Rental Market Begins to Stabilise
Finland’s rental market has also undergone a shift over the past two years.
Following strong rent increases during 2022 and 2023, rental growth slowed significantly in 2024 and 2025. By the end of 2025, nationwide rental inflation had fallen to just 0.4% year-on-year.
In several major cities—including Helsinki, Tampere and Turku—non-subsidised rents even declined slightly.
However, occupancy levels have started to improve, particularly in the Helsinki metropolitan area. Analysts attribute this trend to reduced new housing construction and continued migration toward major urban centres.
Average rents across Finland stood at around €15.51 per square metre in late 2025. In Helsinki, non-subsidised rents remained significantly higher, averaging more than €21 per square metre.
Gross rental yields for apartments averaged about 5.5% nationwide, with smaller cities offering higher yields while Helsinki delivered lower returns due to higher property values.
A Market Slowly Moving Toward Balance
Finland’s housing market in 2026 reflects a sector in transition. Transaction activity is improving, interest rates have stabilised, and construction remains limited.
However, property prices are still under pressure due to excess listings and cautious consumer sentiment.
If economic confidence strengthens and housing inventory gradually declines, price growth could return in the coming years. Until then, the market is likely to remain balanced in favour of buyers, with sellers adjusting expectations as the housing sector slowly moves toward recovery.
