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
What will happen in Finland’s real estate market? Will prices go up or down? Is Helsinki still a hotspot for foreign investors? How is Finland’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Finland, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Finland’s home prices will even out after growing quickly
Finland's residential property market is finally calming down after a period of rapid growth.
One reason for this is the sharp drop in new housing construction. In 2023, the number of new housing starts in Finland was cut in half, down to just 18,000. This slowdown in construction is expected to continue into 2024, with only slight decreases in new projects.
Rising interest rates are also playing a big role. By mid-2024, mortgage interest rates hit 4.31 percent, making it pricier for people to buy homes. This has led to fewer property transactions as potential buyers find it harder to afford loans.
Finland's economy isn't helping either. In 2023, the GDP dropped by 1 percent, largely because the construction sector took a hit. This economic slump has made people more cautious about spending, which in turn reduces the demand for buying property.
Looking back, property prices in Finland have shown cyclical patterns. The recent price drops are happening faster than they have since the early 1990s recession. This suggests that prices might stabilize or even dip further before bouncing back.
Consumer confidence surveys show that people are being careful with their money, and this cautious behavior is likely to stick around, affecting property prices. So, if you're thinking about buying, it might be worth keeping an eye on these trends.
Sources: FIEC Statistical Report, Statista, BoF Bulletin
2) Demand for eco-friendly properties will grow as sustainability becomes a global priority among foreign buyers
In Finland, eco-friendly properties are gaining popularity among foreign buyers.
People are increasingly aware of their environmental impact, and this is reflected in the real estate market. In Finland, there's a noticeable shift towards using sustainable building materials. This trend is expected to boost the Hardware & Building Materials sector, with a projected growth of 2.19% from 2024 to 2029. The demand for these materials is a clear sign that buyers are prioritizing sustainability.
Finland is on a mission to become carbon neutral by 2035, and the government is backing this up with strong policies. The new Building Act, effective in 2025, will enforce circular economy requirements and limit the carbon footprint of construction projects. These measures not only promote eco-friendly practices but also make such properties more appealing to international investors.
Green mortgages are another factor driving this trend. They offer financial benefits for those investing in energy-efficient homes, making eco-friendly properties a smart choice. These homes often come with a premium price tag, but the investment is worthwhile. The influence of global agreements like the Paris Agreement highlights the growing importance of sustainability in real estate.
Foreign buyers are particularly drawn to properties that align with these global sustainability goals. The Finnish market is responding with innovative solutions, making it a hotspot for eco-conscious investors. The combination of government support, financial incentives, and market demand is creating a perfect storm for the rise of eco-friendly properties.
As sustainability becomes a global priority, foreign buyers are focusing on eco-friendly properties in Finland. This trend is not just a passing phase; it's a reflection of a broader shift towards more responsible living. With the world watching, Finland is setting an example in the real estate market.
Sources: Statista, Climate 2035, IMF, World Economic Forum
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.
3) Yields in tourist areas will vary as travel patterns and preferences change
Yields in tourist-heavy areas like Finland can change a lot due to shifts in travel patterns and preferences.
In 2023, Finland welcomed a huge number of overnight stays, with international visitors making up nearly six million of these. This means that when more tourists come, businesses like hotels and restaurants can expect to earn more.
But these numbers aren't set in stone. For example, in summer 2024, there was a 10% increase in leisure trips compared to the previous summer. This shows that seasonal trends and popular travel times can really affect how much money these areas pull in.
Travel preferences also play a big role. Take Lapland, for instance, which saw strong growth in foreign overnights from places like France, the USA, and China. When certain spots get trendy, they see a boost in tourist spending, while others might not see the same benefits.
So, if you're thinking about buying property in these areas, keep in mind that yields can fluctuate with these travel trends. It's all about being in the right place at the right time.
Understanding these dynamics can help you make smarter investment choices, especially in regions where tourism is a major economic driver.
Sources: Statista, Statistics Finland, Business Finland
4) Property prices in Finland's coastal areas will drop because of rising sea levels and climate change worries
Coastal areas in Finland are facing declining property prices due to rising sea levels and climate change concerns.
In Helsinki, experts predict that by 2100, the sea level could rise by more than half a meter. While land uplift offers some protection, it won't fully counteract these changes, especially along Finland's southern coast. This means that flood risks are expected to increase, impacting property values.
From the 2050s onward, coastal flood damage is anticipated to become more frequent. Currently, there are seven significant coastal flood risk areas in Finland, and this number is expected to grow. As sea levels rise and rainfall increases, the risk to properties becomes more pronounced.
Insurance premiums for coastal properties are climbing. The higher risk of natural disasters like flooding means insurance companies charge more, making coastal properties more expensive to own. This can deter potential buyers, contributing to the decline in property prices.
Government advisories and zoning changes are considering rising sea levels for new constructions, but older buildings often haven't accounted for these risks. This oversight can impact property values as buyers become more cautious. Public awareness campaigns and media coverage are also highlighting the risks, which can reduce buyer interest.
As these factors converge, the market for coastal properties in Finland is likely to see a shift. Buyers are becoming more aware of the potential risks, and this awareness is reflected in the decreasing demand for properties in these vulnerable areas.
Sources: Phys.org, Bank of Finland Bulletin, Steadily
5) Rents in student areas will increase as universities grow and attract more international students
In 2023, Finland's student enrollment surged with 168,000 university attendees, a 2.7% increase from the previous year.
With the Finnish government actively expanding university campuses, thousands of new study places have been funded to accommodate this growing student population. This naturally boosts the demand for housing near these educational hubs.
Finland's initiatives to attract international students have paid off, with a record-breaking 61,000 applications for higher education in 2023, nearly double from 2022. This influx is putting extra pressure on student housing.
According to surveys by the Finnish Associations of Student Housing Organisations, cities are struggling to keep up. In Helsinki, only one in four student applicants can find accommodation, highlighting the housing shortage.
As universities expand and draw more international students, rents in student-heavy areas are climbing. This trend is particularly evident in cities like Helsinki, where the demand far outstrips supply.
Sources: Statistics Finland, OECD Report, GSL Global
In this video, 'How much rent for student in Vaasa', we can see that rents in student-heavy areas are rising due to university expansions and increased international enrollments, affecting local rental markets.
6) Urban rents will rise as city living stays popular
Helsinki's population has surged by nearly 11,000 people between 2022 and 2023, a growth rate not seen since the 1960s.
People are flocking to cities like Helsinki for job opportunities, which naturally boosts the demand for housing. But here's the catch: the construction sector is struggling, leading to a potential housing shortage. This limited supply, combined with the strong demand from young professionals and students who prefer city living, is pushing rents higher.
Urban living is more appealing than ever, with many drawn to the vibrant lifestyle and amenities that cities offer. This trend is not just a passing phase; it's a strong indicator that rental demand will stay robust as more people choose city life.
In Helsinki, the housing market is feeling the squeeze. The combination of a growing population and a sluggish construction sector means that finding a place to rent is becoming more competitive. This competition is a key factor driving up rental prices.
Young professionals and students are particularly keen on city living, adding to the demand. With the current housing supply unable to keep up, rents are likely to continue rising as more people move to urban centers.
As urbanization trends persist, the allure of city amenities and lifestyle keeps drawing people in. This ongoing shift suggests that the demand for rental properties will remain strong, especially in bustling cities like Helsinki.
Sources: Helsinki Times, ETIAS, Yardi Matrix
7) Demand for rentals near universities will rise as more international students arrive
In 2024, Finland welcomed 22,792 international students into its higher education institutions.
This influx includes 12,484 students in universities and a notable number of 7,101 first-time international students. The trend has been on the rise since 2022, when Finland saw a significant increase in residence permits for students from outside the EU, marking a 45% jump from the previous period.
In Helsinki, the demand for student housing is intense, with around 8,000 students waiting for accommodation. This scenario is mirrored in other cities like Turku and Jyväskylä, where student housing applications are outpacing the availability of private rentals.
University towns such as Tampere and Oulu are also feeling the pressure, with housing shortages becoming a common issue. In Jyväskylä, the Central Finland Student Housing Foundation is swamped with over 800 applications, receiving dozens more each day, highlighting the challenge of accommodating every applicant.
With the growing number of international students, the demand for rental properties near universities is expected to rise, making it a potentially lucrative market for property investors.
Sources: Erudera, Yle, Eurydice
Our team found this video, 'Study in Finland Applicant Webinar 3 Dec 2024', which highlights the rise in international students, driving demand for student housing near universities. The video also explains the importance of these accommodations for the Finnish education system.
8) Demand for small, energy-efficient apartments will grow as more people choose city living
Urban living is booming in Finland, with more people flocking to cities.
In 2023, 85.8% of Finland's population lived in urban areas, highlighting a major shift towards city life. This trend means that space is at a premium, and people are increasingly opting for compact living arrangements.
Energy costs have surged in Europe, and Finland is no exception. As a result, there's a growing demand for energy-efficient homes as residents seek to cut down on their energy bills. The Finnish government is encouraging this shift by offering financial incentives for energy-efficient construction, making it a smart move for developers.
In cities, households are getting smaller, which naturally leads to a preference for compact apartments. With property prices climbing, smaller, more affordable apartments are becoming the go-to choice for many. These homes not only save money but also align with Finland's commitment to environmental sustainability.
Finnish consumers are increasingly conscious of their carbon footprint, driving the demand for sustainable living options. This awareness is pushing the market towards energy-efficient and environmentally friendly housing solutions.
Sources: Most Urbanized Countries, Finland’s Energy and Climate Policies, Implementation of the EPBD in Finland
We have made this infographic to give you a quick and clear snapshot of the property market in Finland. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Demand for accessible and senior-friendly housing will grow as the population ages
Finland's population is getting older, with more than a quarter expected to be over 65 by 2030.
As people live longer, they need homes that suit their changing needs. The Finnish government is aware of this and is working on making the country more age-friendly. This means creating housing and services that cater to an aging population.
The demand for senior-friendly housing is already on the rise. In early 2024, there was a 40% increase in people moving into senior housing compared to the previous year. This trend highlights the growing need for homes designed with seniors in mind.
In Finland, nearly 19% of the population was between 50 and 64 years old in 2023, indicating a significant portion of the population is nearing retirement age. This demographic shift is driving the demand for accessible housing options.
With more seniors looking for suitable living arrangements, the housing market is adapting. Developers are focusing on creating homes that are not only accessible but also comfortable for older adults. This includes features like single-level living, wider doorways, and easy-to-navigate spaces.
As the population ages, the need for senior-friendly housing will continue to grow. This shift presents opportunities for those looking to invest in the property market, especially in areas that are adapting to these changes.
Sources: EUROSTAT, UNECE, NIC MAP Vision, THL
10) Property values will be affected as new rules encourage building energy-efficient homes
In Finland, new homes must meet strict energy efficiency standards due to recent updates in building codes.
These updates are part of a broader effort by the Finnish government to promote sustainability. Subsidies are available for energy efficiency improvements, making it financially attractive for builders and homeowners to invest in eco-friendly technologies. This not only helps the environment but also offers long-term savings on energy bills.
There's a noticeable shift in consumer preferences towards sustainable living. Eco-friendly homes are in high demand, and this trend is reflected in the popularity of green building certifications like the energy performance certificate (EPC). Buyers are increasingly drawn to properties that promise lower energy costs and a smaller carbon footprint.
As a result, energy-efficient homes are becoming more valuable in the real estate market. This is not just a trend but a growing expectation among buyers who prioritize sustainability. The appeal of these homes is not only their reduced environmental impact but also their potential to increase in value over time.
Insider knowledge suggests that new regulations will incentivize the construction of energy-efficient homes, further impacting property values. Builders are keen to align with these standards, knowing that energy-efficient homes are more attractive to buyers and can command higher prices.
For anyone considering buying property in Finland, understanding these dynamics is crucial. Investing in an energy-efficient home could be a smart financial move, given the current market trends and government incentives.
Sources: Implementation of the EPBD Finland, OECD iLibrary, GBPN Library
11) Maintaining older properties will become more expensive due to stricter environmental regulations
Maintaining older properties is becoming more expensive due to stricter environmental regulations, especially in Finland.
These regulations demand that buildings meet new energy efficiency standards, which can be tough for older structures. For example, the National Building Code of Finland now requires very low maximum u-values and air-tightness testing. This means older buildings often need significant upgrades, like better insulation and heating systems, to comply.
The National Energy and Climate Plan (NECP) points out that emissions from buildings, especially those with oil-based heating, are a big concern. While there are subsidy schemes to help phase out these systems, the initial renovation costs can be steep. Property owners might face substantial upfront expenses to make their buildings compliant.
Adding to the financial burden is the increased frequency of mandatory energy audits. In Finland, these audits often show that older buildings need more frequent and costly assessments. This is because they typically require more work to meet the updated energy efficiency standards, leading to higher maintenance costs over time.
For those considering buying property in the country, it's important to factor in these potential costs. The need for upgrades and frequent audits can make owning an older property more expensive than it initially seems. Understanding these hidden costs can help you make a more informed decision.
In Finland, the push for energy efficiency is strong, and while it benefits the environment, it also means that maintaining older properties can be a financial challenge. Being aware of these regulations and their implications is crucial for anyone looking to invest in real estate here.
Sources: Europarl, GBPN Library, EPATEE Case Study
Don't buy the wrong property, in the wrong area of Finland
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Demand for urban apartments will grow as young professionals focus on city careers
Young professionals are flocking to cities in search of better career opportunities.
In Finland, this trend is particularly noticeable as urban areas are buzzing with economic growth, especially in the tech and startup sectors. These industries are heavily concentrated in cities, making them a magnet for young talent eager to climb the career ladder. Urban centers are becoming the go-to places for ambitious individuals looking to make their mark.
Many surveys highlight that young professionals are drawn to city life because it offers a better work-life balance. Cities provide easy access to workplaces, public transportation, and amenities, which simplifies daily life. The convenience of urban living is a major draw for those balancing demanding careers and personal lives.
The shift from rural to urban living is a big deal, largely because cities offer more job opportunities and educational resources. This migration is fueling a surge in demand for rental properties in urban areas. Real estate markets are seeing a spike in urban apartment sales as a result.
Young professionals are not just looking for jobs; they want to be part of vibrant communities where they can grow both personally and professionally. Cities offer the kind of dynamic environment that supports this growth. Urban living is increasingly seen as essential for career advancement and personal development.
As more young people move to cities, the demand for urban apartments is expected to keep rising. This trend is reshaping real estate markets, with urban areas becoming hotspots for property investment. Investors are keenly watching these developments as they unfold.
Sources: OECD Report, Knight Frank Wealth Report, Economy and Finance Report
13) Demand for sustainable housing in Finland will grow as consumers prioritize eco-friendly options
Finnish homebuyers are increasingly prioritizing sustainability in their housing choices.
One major factor is the Finnish government's push for higher energy efficiency standards in building codes. These regulations ensure that new homes are built to be energy-efficient, making sustainability a key focus in the housing market. This means that when you're looking at properties, you'll likely find homes that are not only modern but also designed to save energy and reduce environmental impact.
There's also a growing trend in the use of eco-friendly building materials. More and more people are choosing materials that are better for the environment, driven by a desire to lower their carbon footprints. This shift is not just a passing fad; it's expected to continue, showing a long-term commitment to sustainable living. As a result, the market for these materials is expanding, making it easier for you to find homes that align with these values.
Finland is seeing a rise in green-certified buildings, which highlights the country's dedication to sustainable architecture. These certifications are a testament to the quality and environmental responsibility of the construction, offering you peace of mind that your potential new home meets high sustainability standards.
Government incentives are also encouraging homeowners to make energy-efficient upgrades. Programs like the Net-Zero Government Initiative offer benefits for adopting renewable energy and reducing carbon emissions. This means you might find homes that have already been upgraded, saving you time and money on renovations.
With increased media coverage on the benefits of sustainable living, Finnish consumers are becoming more aware of the importance of these choices. This awareness is driving the demand for homes that are not only beautiful but also environmentally friendly, making it a great time to invest in a property that supports a sustainable lifestyle.
Sources: IMF, Constructive Voices, Statista, Rated Power
In this video, 'Tiny house Shadow – a small home with big environmental benefits', we see how Finnish consumers are prioritizing sustainability in housing by adopting eco-friendly solutions. This trend underscores the growing demand for sustainable housing.
14) Demand for properties in Tampere will grow as universities expand and attract more students
The demand for properties in university towns like Tampere is on the rise.
One big reason is the growing number of students enrolling in universities. For example, Tampere University saw a 38% increase in master's program applications in 2024 compared to the previous year. More students mean more need for housing.
Finland's government is also playing a part by strongly supporting higher education. They have ambitious plans to attract more international students, aiming to triple their numbers and encourage them to stay in Finland after graduation. This push not only boosts the student population but also creates a need for more housing options in university towns like Tampere.
Adding to the mix, the Tampere Student Housing Foundation reported a record number of housing applications in 2023. This indicates a shortage of student housing, and with high demand for different types of apartments, rental prices are likely to rise as more students seek accommodation.
The growing student population and government support are likely to lead to increased investment in infrastructure and amenities. This will further drive up property demand, making Tampere an attractive spot for property buyers.
Sources: Tampere University News, Yle News, The PIE News
We made this infographic to show you how property prices in Finland compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Smart home features will become standard in new Finnish homes as tech adoption rises
In Finland, the smart home market is booming, with projections showing a leap from USD 434.6 million in 2023 to USD 2290.1 million by 2030.
People are drawn to smart homes for their energy efficiency, security, and convenience. Imagine controlling your home’s temperature or security system from your phone—75% of potential buyers are willing to pay extra for these perks.
The Finnish government is all in on digitalization and cybersecurity, which means smart technology is becoming a staple in urban areas where most Finns live. This makes smart homes not just a luxury but a practical choice for new properties.
Tech companies and real estate developers are teaming up, making it easier to integrate smart features into new homes. This collaboration is key to the growing trend of tech-enabled living spaces.
Media buzz about smart homes highlights their benefits, like improved energy efficiency, which only adds to their appeal. As more people hear about these advantages, interest continues to rise.
With tech adoption on the rise, smart home technology is set to become a standard feature in new Finnish properties, changing the way people live.
Sources: NextMSC, Theseus, Exploding Topics
One of our partners sent us this video, 'Kick-off: Helsinki City Housing Company Innovation Program', where we see smart home technologies being integrated into residential properties, reflecting Finland's tech-savvy housing innovations.
16) Northern Finland properties will gain appeal as remote work infrastructure and connectivity improve
Properties in northern Finland are becoming more appealing thanks to better remote work infrastructure and connectivity.
The Finnish government is actively boosting digital infrastructure, with efforts like a working group focused on 6G communication technologies. This initiative is set to enhance digital connectivity nationwide, including in the northern regions, making them more attractive for remote work.
Remote work is gaining traction, with 35% of wage and salary earners working remotely in 2023, according to Statistics Finland. This trend is continuing into 2024, showing that more people are embracing remote work. As a result, there's a growing interest in properties in less crowded areas like northern Finland.
The Quality of Work Life Survey reveals that more employees are opting to work mainly from home, reinforcing this shift. This change in work habits is driving demand for homes in quieter, more serene locations.
Investments in digital infrastructure, including 6G technologies, are expected to boost internet connectivity in northern Finland. While specific data on speed improvements isn't available, these investments suggest significant enhancements, making the region a viable choice for remote workers.
With improved connectivity, northern Finland offers a peaceful environment with reliable internet access, appealing to those seeking a balance between work and tranquility.
Sources: UNECE, Statistics Finland, 6G Flagship
17) Virtual reality will transform property viewings, allowing international buyers to explore Finnish real estate more easily
Virtual reality is changing how we explore properties, especially for those eyeing Finnish real estate from abroad.
In recent years, the global AR/VR market has been booming, and this trend is making waves in real estate. Listings with virtual tours are getting a lot more attention, with 87% more views compared to those without. This means potential buyers are spending more time exploring these properties online.
Finland is embracing this technology with open arms. Finnish real estate agencies are leading the charge, offering immersive experiences that let you explore homes from anywhere. Companies like Exsight 360 are expanding their virtual tour options, making it a breeze for international buyers to check out Finnish properties without leaving their couch.
Buyers are loving these virtual tours. A whopping 67% of home buyers prefer listings with virtual tours. It's especially popular among young adults aged 18 to 34, who are more likely to book properties that offer this feature. The introduction of 5G has made these tours even smoother and more accessible, enhancing the overall experience.
With VR, you can virtually walk through a Finnish home, getting a feel for the space and layout as if you were there in person. This is a game-changer for international buyers who can't just hop on a plane to visit every property they're interested in.
As VR technology continues to evolve, it's becoming an essential tool for real estate, making it easier than ever for buyers worldwide to explore and purchase properties in Finland.
Sources: PhotoUp, Dimecc, Market.us
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.