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Finland's real estate market is experiencing a recovery phase in 2025, making it an increasingly attractive destination for property investors.
Property prices have stabilized after a correction period, transaction volumes are rising significantly, and international investors are returning to the market with renewed confidence. The Finnish property market shows moderate price growth forecasts through 2026, particularly in urban centers like Helsinki and Espoo.
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Finland's property market is recovering in 2025 with transaction volumes surging and moderate price growth expected through 2026.
Urban areas like Helsinki, Espoo, and Oulu are leading the recovery with forecast price increases of 2-4% annually.
| Market Indicator | Current Status (2025) | 2026 Forecast |
|---|---|---|
| National Price Growth | 1.5% increase | 2.5% increase |
| Helsinki Price Growth | Stabilized | 2-4% increase |
| Mortgage Rates | 2.4% (12-month Euribor) | Declining trend |
| Rental Yields (Helsinki) | 2.8-3.8% (up to 4.7%) | Stable to improving |
| Transaction Volumes | Rising significantly | Continued growth |
| International Investment | Returning strongly | Increased activity |
| Economic Growth | 0.5% in 2025 | 1.5-1.6% forecast |
What is the current state of the Finnish real estate market?
The Finnish real estate market is in a clear recovery phase as of September 2025.
Transaction volumes have surged significantly compared to 2024, with international investors returning to the market after a period of caution. The residential segment is particularly strong, especially in urban areas where demand is outpacing supply. Investment sentiment has shifted from negative to positive, with major deal activity focusing on residential portfolios and prime urban assets.
The market has transitioned from a buyer's market back toward balance, though significant regional differences remain. Urban centers are experiencing renewed activity while rural areas continue to struggle with weak demand. Liquidity has improved substantially, making it easier for investors to enter and exit positions.
As of September 2025, the Finnish property market shows clear signs of stability and growth potential, particularly for investors focusing on residential properties in major cities.
How have property prices in Finland been trending over the past year?
Finnish property prices have stabilized and begun recovering after a correction period that lasted through 2024.
Nationally, average prices for second-hand dwellings fell by approximately 1.3% year-on-year in early 2025, but this decline has bottomed out by mid-year. New apartments have demonstrated remarkable resilience, with prices increasing by 1.6% year-on-year as of Q1 2025, reaching up to 3.7% growth in major cities.
From their summer 2022 peak, home prices had dropped by 10-12%, but this correction phase is now complete. The stabilization reflects renewed buyer confidence, improved financing conditions, and reduced uncertainty about future market direction. Urban markets like Helsinki and Espoo are leading the price recovery, while rural areas continue to experience stagnation.
The trend indicates that the worst of the price correction is behind us, with moderate growth expected to continue through the remainder of 2025.
Is there a forecast for property price growth or decline in the near future?
Property prices in Finland are forecast to rise moderately through 2026, with national growth expected at 1.5% in 2025 and 2.5% in 2026.
Helsinki specifically is projected to see price increases of 2-4% in 2026, with the best-performing districts expected to nearly recover to their 2022 peak levels. The growth is driven by low construction activity, easing interest rates, and continued population inflows to growth centers.
Regional leaders include Espoo-Kauniainen with a forecast growth of 2.7% in 2025, Oulu at 2.6%, and Rovaniemi showing positive growth projections. These forecasts are based on fundamental supply-demand imbalances, where construction starts remain historically low while urban population growth continues.
The moderate growth trajectory reflects a healthy market recovery rather than speculative bubbles, making it attractive for long-term investors seeking stable returns.
How do interest rates in Finland compare to other countries right now?
Finnish mortgage rates are currently more favorable than many European countries, with the average 12-month Euribor rate at 2.4% in early 2025.
This rate is lower than the European average during the same period and significantly more attractive than rates in countries like the UK or some Eastern European markets. The declining trend in Finnish mortgage rates is supporting renewed market activity and making property purchases more affordable for both domestic and international buyers.
The favorable interest rate environment is one of the key factors driving the current market recovery. Lower borrowing costs improve property affordability and increase potential returns on leveraged investments. Finland benefits from its stable economy and AAA credit rating, which helps maintain competitive borrowing rates.
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What is the average return on investment for real estate in Finland?
Gross rental yields in Finland vary significantly by location, with Helsinki city center offering returns between 2.8% and 3.8%.
Select neighborhoods in Helsinki can achieve yields up to 4.7%, while suburban areas typically offer slightly higher yields due to lower property prices. These yields are moderate by European standards but reflect market stability and consistently low vacancy rates in urban areas.
The returns become more attractive when considering capital appreciation potential, especially in urban centers where prices are forecast to grow 2-4% annually. Total returns (rental yield plus capital appreciation) in prime Helsinki locations could reach 6-8% annually over the medium term.
For investors seeking stable, long-term returns with low risk, Finnish real estate offers compelling opportunities, particularly when purchased at current market levels before the forecast price increases materialize.
Are there any government policies or incentives for property buyers in Finland?
Finland maintains steady policies for both foreign and domestic property investors, though no major new incentives were introduced in 2025.
The government continues to monitor housing allowances and affordability programs but has not implemented major stimulus measures during this recovery period. This stable policy environment provides predictability for investors, avoiding the uncertainty that policy changes can create.
Existing policies remain investor-friendly, with straightforward property ownership rules and transparent tax structures. The absence of new restrictions or sudden policy changes supports the current market recovery and provides confidence for long-term investment planning.
Foreign investors benefit from Finland's EU membership and stable regulatory environment, making it easier to navigate property transactions compared to countries with more complex or changing regulatory frameworks.
What are the property taxes like in Finland for homeowners?
Finnish property owners face a local property tax (kiinteistövero) that typically ranges from 0.41% to 2% of the property's taxable value.
| Tax Type | Rate | Applied To |
|---|---|---|
| Annual Property Tax | 0.41% - 2% | Taxable property value |
| Transfer Tax (Apartments) | 2% | Purchase price |
| Transfer Tax (Houses) | 4% | Purchase price |
| Capital Gains Tax | 30% or 34% | Profit from sale |
| Rental Income Tax | Progressive rates | Net rental income |
The tax rates vary by municipality, with urban areas typically charging higher rates than rural locations. Transfer taxes apply at purchase, with apartments subject to 2% and houses to 4% of the purchase price. These rates are reasonable compared to many European countries and provide predictable carrying costs for property investors.
What is the rental market like in Finland, especially in urban areas?
The Finnish rental market shows strong demand in urban centers, particularly Helsinki where 31% of households rent their homes.
Monthly rents for one-bedroom apartments in Helsinki typically range from €800 to €1,200, with modest annual rental price growth of 1.6%. The demand is driven by affordability considerations, lifestyle preferences, and flexible work arrangements that make renting attractive to many residents.
Student housing and smaller flats face some demand headwinds due to social benefit reforms, but overall rental demand remains robust. The rental market benefits from consistent population growth in urban areas and limited new construction, creating a supply-demand imbalance that supports stable rental income for investors.
Vacancy rates remain low in desirable urban locations, providing reliable income streams for property investors. The rental market's stability makes it attractive for investors seeking predictable cash flows.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Finland versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How stable is the Finnish economy, and how might it affect the real estate market?
Finland's economy demonstrates solid stability with GDP growth of 0.5% in 2025 and projected expansion of 1.5-1.6% in 2026 and 2027.
Inflation remains subdued below 2%, improving real investment returns and property affordability for buyers. This economic stability supports household incomes and maintains property demand, particularly in urban centers where economic activity is concentrated.
Finland benefits from its position within the EU and strong trade relationships, though global trade policy factors continue to influence economic momentum. The country's AAA credit rating and stable political environment provide confidence for both domestic and international property investors.
The economic recovery supports the real estate market by maintaining employment levels, supporting household incomes, and creating confidence for major purchase decisions. This stability is a key factor in the current property market recovery.
Are there any areas in Finland where real estate is performing better than others?
Several Finnish regions are significantly outperforming the national average in terms of property price growth and investment activity.
Espoo-Kauniainen leads with a forecast growth of 2.7% in 2025, followed by Oulu at 2.6%, and Rovaniemi showing positive growth projections. Helsinki, while more mature, is expected to see 2-4% price growth in 2026, with select districts potentially reaching their 2022 peak levels.
Urban centers consistently outperform rural areas, where demand remains fragile and prices continue to stagnate. The performance gap reflects population migration toward growth centers, limited new construction in popular areas, and stronger economic fundamentals in major cities.
Investors should focus on these growth leaders while avoiding rural markets that face structural challenges including population decline and weak economic activity.
It's something we develop in our Finland property pack.
How does the demand for housing compare to supply in Finland?
Housing demand significantly outpaces supply in Finland's urban centers, creating favorable conditions for property investors.
Construction starts remain at historically low levels, creating future supply bottlenecks especially in urban areas experiencing population growth. While some oversupply lingers in certain markets from the previous boom period, urban centers face a clear supply shortage relative to demand.
This supply-demand imbalance is a primary driver of the forecast price increases through 2026. New residential construction has not kept pace with population growth and household formation in major cities, creating upward pressure on both purchase prices and rental rates.
The supply shortage is particularly acute for quality housing in desirable locations, making well-located properties increasingly valuable assets for long-term investors.
What is the process of buying real estate in Finland for a foreigner?
Foreigners can freely purchase property in Finland through a straightforward process with minimal restrictions.
EU/EEA buyers face no restrictions, while most third-country nationals can also purchase freely, though extra due diligence may be required for certain plots near borders or military installations. The buying process involves signing a deed of sale, paying transfer tax, updating the land register, and for apartments, notifying the housing company.
Required steps include identity verification, notary or legal checks, and registration with Finnish authorities. The process is typically completed within a few weeks to a couple of months, depending on financing arrangements and legal review requirements.
Legal fees, transfer taxes, and registration costs should be budgeted at approximately 6-8% of the purchase price. Professional assistance from local real estate agents and lawyers is recommended to navigate the process efficiently.
It's something we develop in our Finland property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Finnish property market in 2025 presents a compelling opportunity for investors seeking stable returns in a recovering market.
With moderate price growth forecasts, favorable interest rates, and strong rental demand in urban centers, now appears to be an opportune time to enter the Finnish real estate market before prices reach their full recovery potential.
Sources
- The European - Finland's Property Market Rebounds
- Global Property Guide - Finland Price History
- Newsec - Finland Real Estate Market Q2 2025
- Nordea - Finland Housing Market Review Q1 2025
- Investropa - Finland Price Forecasts
- Investropa - Helsinki Price Forecasts
- Realting - How the Finnish Real Estate Market Has Changed
- YLE - Finnish Property Market Analysis
- Nordea - Finnish Economic Outlook
- Helsinki Times - Finland's Housing Oversupply