Authored by the expert who managed and guided the team behind the Finland Property Pack
Everything you need to know before buying real estate is included in our Finland Property Pack
Property prices in Finland are showing cautious signs of recovery after experiencing their sharpest decline since the early 1990s. The Finnish residential market is stabilizing with national prices forecast to rise approximately 1.5% in 2025, though significant regional variations persist between major cities like Helsinki and smaller towns across the country.
While urban centers are steadying and new construction remains at historic lows, several warning signs including high unsold inventory, construction bankruptcies, and affordability pressures continue to create uncertainty about the market's long-term stability.
If you want to go deeper, you can check our pack of documents related to the real estate market in Finland, based on reliable facts and data, not opinions or rumors.
Finland's property market is emerging from a multi-year downturn with prices expected to grow modestly in urban areas, supported by lower interest rates and mortgage reforms.
However, significant risks remain including supply constraints, construction industry challenges, and pronounced differences between city and rural market performance.
| Market Indicator | Current Status (2025) | Outlook |
|---|---|---|
| National Price Growth | +1.5% forecast for 2025 | Modest recovery expected |
| Helsinki Area Prices | €3,651/m² average | Leading recovery |
| Interest Rates | 2.4% (12-month Euribor) | Supporting demand |
| New Construction | 21,000 units (historic low) | Supply shortages expected |
| Sales Volume | Five-year low in 2024 | Gradual improvement expected |
| Mortgage Applications | +24% YoY in January 2025 | Positive trend continuing |
| Construction Bankruptcies | Rising trend | Ongoing industry challenges |
What are property prices in Finland doing right now?
Finnish property prices are stabilizing and showing early signs of recovery as of September 2025.
National property prices are forecast to increase by approximately 1.5% in 2025, marking the first positive growth after the sharpest decline since the early 1990s. New apartments are already demonstrating stronger performance with 3.7% year-on-year growth in Q1 2025, while older apartments continue to experience modest declines with a 1.3% decrease year-on-year as of June 2025.
This recovery is being driven primarily by falling interest rates, with the 12-month Euribor dropping to 2.4% in mid-2025 from over 4% in 2024. The improved financing conditions have resulted in a 24% year-on-year increase in mortgage applications in January 2025, indicating renewed buyer confidence.
However, overall sales volumes remain at five-year lows, and the recovery is primarily concentrated in urban centers rather than being a nationwide phenomenon. The market is showing signs of bottoming out after prices fell more than 10% from their 2022 peak.
How have property prices in Finland changed over the past few years?
Finland's property market has experienced significant volatility over recent years, with prices peaking in 2022 before entering a sharp correction phase.
Property prices reached their peak in 2022, followed by a dramatic decline of more than 10% by early 2024. This represented the most severe price correction since the early 1990s Finnish banking crisis. The decline was broad-based, affecting both urban and rural areas, though the impact varied significantly by location.
The correction began in late 2022 as interest rates started rising rapidly due to European Central Bank monetary tightening. Rising borrowing costs, combined with economic uncertainty and inflation concerns, dampened buyer demand and forced many sellers to reduce asking prices.
By 2024, the market began showing signs of stabilization, with prices bottoming out in early 2024. The recovery has been gradual, with new apartment segments leading the way while older properties continue to face headwinds. Regional variations have become more pronounced, with Helsinki and other major cities showing resilience while smaller towns continue to struggle.
It's something we develop in our Finland property pack.
Are there big differences between property prices in cities like Helsinki and smaller towns?
Yes, there are substantial differences between property prices in major Finnish cities and smaller towns, with the gap widening during the recent market correction.
| Location Type | Average Price per m² | Typical Budget Range |
|---|---|---|
| Helsinki Secondary Market | €3,651/m² | €200,000-€400,000 |
| Espoo-Kauniainen | €3,858/m² | €200,000-€400,000 |
| Tampere | Below €2,000/m² | Under €200,000 |
| Jyväskylä | Below €2,000/m² | Under €200,000 |
| Oulu | Below €2,000/m² | Under €200,000 |
| Smaller Towns | Varies widely | Under €150,000 |
| Building Plots Helsinki | 1.5x national average | Premium pricing |
What is happening with housing demand in Finland at the moment?
Housing demand in Finland is showing signs of cautious recovery, though it remains well below historical averages.
Overall housing sales hit a five-year low in 2024, with buyers demonstrating particular caution outside the capital region. The share of renters has reached record highs in urban areas, indicating that many potential buyers are choosing to delay purchase decisions or cannot afford to buy.
However, demand is beginning to stabilize in urban centers like Helsinki, Espoo, and Tampere. Mortgage application data shows a 24% year-on-year increase in January 2025, suggesting that lower interest rates are starting to attract buyers back to the market.
The demand recovery is being supported by recent government mortgage reforms that have extended loan terms to 35 years and raised the loan-to-value ceiling to 95%. This allows first-time buyers to access homes with just 5% down payment, significantly improving affordability for entry-level buyers.
Regional demand patterns show stark differences, with Helsinki area maintaining relatively steady interest while smaller towns face either stagnant or declining demand.
Don't lose money on your property in Finland
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Is the supply of new housing increasing or slowing down?
New housing supply in Finland is at historically low levels, creating significant supply constraints across the market.
New housing starts reached just 21,000 units in 2023, representing one of the lowest levels on record. Construction activity has been severely impacted by rising material costs, higher interest rates affecting developer financing, and increased construction company bankruptcies.
The construction industry is facing a crisis, with numerous builders filing for bankruptcy due to cost pressures and reduced demand. This has created a vicious cycle where reduced supply is likely to support future price growth, but current economic conditions make new development challenging.
Unsold inventory remains high, especially outside Helsinki, indicating that while new construction is limited, existing completed units are still working through the market. However, this inventory is not evenly distributed geographically.
Significant supply shortages are expected in urban centers until at least 2027, as the combination of low construction starts and steady urban demand creates an imbalance. This supply constraint is one of the key factors supporting analyst predictions for modest price recovery in major cities.
How are interest rates in Finland affecting homebuyers?
Falling interest rates are providing significant support to Finnish homebuyers and are a key driver of the market's stabilization.
The 12-month Euribor, which many Finnish mortgages are tied to, has dropped dramatically from over 4% in 2024 to 2.4% in mid-2025. This substantial reduction in borrowing costs has made home purchases more affordable and is attracting buyers back to the market.
Lower rates have translated directly into increased mortgage applications, with a 24% year-on-year increase recorded in January 2025. This indicates that the interest rate environment is successfully stimulating demand after the previous period of high rates suppressed buyer activity.
The European Central Bank is expected to continue cutting rates in 2025, which should provide further support to both buying activity and new construction financing. Developer financing has also benefited from lower rates, though construction activity remains constrained by other factors.
The rate environment is particularly beneficial for first-time buyers, especially when combined with recent mortgage reforms that allow 95% loan-to-value ratios and extended 35-year terms.
What is the state of the Finnish economy and job market right now?
The Finnish economy is stabilizing but remains slow-growing, with mixed implications for the property market.
Economic growth is modest, and the job market, while stable, is not generating the strong wage growth needed to significantly improve housing affordability. Finland's economy has been affected by broader European economic headwinds and geopolitical tensions that have impacted trade and investment.
Employment levels are relatively stable, but job creation is limited, particularly in sectors that traditionally support homebuying such as technology, manufacturing, and professional services. This has contributed to cautious consumer sentiment and delayed major purchase decisions.
The economic environment is characterized by persistent inflation concerns, though these have moderated from previous highs. Consumer confidence remains subdued, reflecting uncertainty about future economic conditions and their impact on personal finances.
However, the economy is not showing signs of entering recession, which provides a foundation for the property market's gradual recovery. The stable, if modest, economic performance supports expectations for continued low interest rates and gradual demand improvement.
Are wages in Finland keeping up with living and housing costs?
Wage growth in Finland is struggling to keep pace with living and housing costs, particularly in major cities like Helsinki.
Real wage growth has been limited, with salary increases failing to match the cumulative impact of inflation and housing cost increases over recent years. This affordability squeeze has contributed to the record high proportion of renters in urban areas, as many households have been priced out of homeownership.
In Helsinki and other growth centers, the disconnect between wages and housing costs is most pronounced. While property prices have declined from their 2022 peaks, they remain elevated relative to local income levels, making homeownership challenging for many Finnish workers.
The affordability challenge has been partially addressed by government mortgage reforms that reduce down payment requirements and extend loan terms. However, these measures increase household debt burdens rather than addressing the underlying income-cost imbalance.
This wage-housing cost dynamic is contributing to cautious home price growth expectations, as the market cannot sustain rapid price increases without corresponding income growth. It also explains why rental demand has reached record levels in urban areas.
It's something we develop in our Finland property pack.
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.
What are international investors doing in the Finnish property market?
International investor activity in Finland is rebounding in 2025, though it remains selective and below pre-pandemic levels.
Foreign investment is particularly focused on residential properties and prime office assets in major cities. International buyers are attracted by what they perceive as undervalued prices following the market correction, as well as reduced currency risk due to the Euro's stability.
The investment flow is primarily coming from other European Union countries, with Nordic investors showing particular interest due to regional familiarity and similar market dynamics. Some institutional investors are also beginning to return to the Finnish market, viewing the current pricing as an entry opportunity.
However, total investment volumes lag significantly behind pre-pandemic highs due to ongoing caution about the Finnish economy and uncertainty about future price trends. International investors remain selective, focusing primarily on Helsinki and other major urban centers while avoiding smaller towns and rural areas.
The renewed international interest is providing some support to urban property prices and helping to absorb inventory in premium segments. However, this investment activity has not been sufficient to drive broad market recovery on its own.
Are government policies or regulations pushing the market up or down?
Government policies are generally supportive of the property market, with recent reforms aimed at improving accessibility and supporting first-time buyers.
The most significant recent policy change has been mortgage market reforms that extended loan terms to 35 years and raised the loan-to-value ceiling to 95%. These changes allow first-time buyers to purchase homes with just 5% down payment, significantly improving affordability and contributing to increased mortgage applications.
Housing subsidy policies have been tightened in some areas, but the government has maintained focus on affordable and social housing development. Public sector initiatives are supporting rental housing density in urban areas, though this has had some dampening effect on private residential construction.
Regulatory changes have generally been market-neutral, with no major tax policy shifts or restrictive measures implemented recently. Planning and zoning policies continue to support urban development, though bureaucratic processes can still create delays for new construction projects.
Overall, government policy is mildly supportive of market recovery, with the mortgage reforms being the most significant positive intervention. However, policies alone are insufficient to drive major market changes without broader economic improvements.
What do experts and analysts predict for the Finnish housing market in the near future?
Real estate experts and analysts are cautiously optimistic about Finland's property market, predicting modest recovery concentrated in urban areas.
The consensus forecast calls for national property price growth of approximately 1.5% in 2025, followed by 2.5% growth in 2026. This recovery is expected to be driven primarily by lower interest rates, constrained new construction supply, and gradually improving demand conditions.
Regional forecasts show significant variation, with Espoo, Oulu, and Rovaniemi expected to lead the recovery with 2-3% price growth in 2025. Helsinki is expected to perform in line with or slightly above the national average, while many smaller towns may continue to experience flat or negative price movements.
Long-term supply constraints are viewed as a key factor supporting future price recovery into 2026 and beyond. The combination of historically low construction starts and steady urban demand is expected to create supply-demand imbalances that support price growth in major cities.
Transaction volumes are expected to remain low in the near term but should improve gradually with stable interest rates and ongoing policy support. However, experts caution that recovery will be gradual rather than rapid, and significant risks remain.
It's something we develop in our Finland property pack.
What warning signs, if any, point to a potential property price crash in Finland?
Several warning signs remain present in the Finnish property market, though experts do not predict an immediate crash.
Key risk factors include high levels of unsold inventory, particularly outside major urban centers, and rising construction company bankruptcies that indicate ongoing industry distress. The construction sector crisis could worsen if economic conditions deteriorate, potentially leading to even lower supply but also reduced confidence.
Affordability pressures remain significant, with wage growth continuing to lag behind living and housing costs. This fundamental imbalance limits the market's ability to sustain rapid price recovery and could become problematic if interest rates reverse course unexpectedly.
The declining homeownership rate and record high proportion of renters indicates that many households remain priced out of the market. If economic conditions worsen or unemployment rises, this could translate into reduced rental demand and further pressure on property investors.
However, analysts note that several factors reduce immediate crash risk, including the constrained supply environment, recently stabilized prices, and supportive monetary policy. The market appears to have found a bottom, though the recovery trajectory remains uncertain and dependent on broader economic performance.
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.
Finland's property market is navigating a delicate recovery phase, with urban centers showing resilience while smaller towns continue to face challenges.
For potential property buyers, the current environment offers opportunities in major cities but requires careful consideration of location, timing, and long-term economic trends.
Sources
- Finland Price Forecasts
- Global Property Guide - Finland Home Price Trends
- International Investment - Finnish Housing Market 2025
- Global Property Guide - Finland Price History
- Finnish Property Market 2025 Report
- YLE News - Property Market Analysis
- YLE News - Housing Market Update
- Realting - Finnish Real Estate Market Changes
- Helsinki Times - Housing Market Regional Differences
- The European - Finland Property Market Rebound