Authored by the expert who managed and guided the team behind the Finland Property Pack
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What will happen in Helsinki’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 real estate agents, property developers, and clients who buy properties in Helsinki, 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) Property prices in Pasila will surge as it becomes a business and entertainment hub
The Pasila district is on the brink of a property price surge as it transforms into a bustling business and entertainment hub.
Thanks to major investments in infrastructure, like the revamped Pasila Railway Station, getting around has never been easier. This improved connectivity is a game-changer for both residents and businesses.
New developments, such as the Mall of Tripla, are turning heads with their mix of shopping, hotels, offices, and apartments. This blend is not just attracting visitors but also making Pasila a lively place to live and work.
The City of Helsinki is pulling out all the stops to make Pasila more accessible, with better parking and transport options. This effort is paying off, as the area is already a hotspot for events.
With the Helsinki Expo and Convention Centre drawing nearly a million visitors each year, Pasila is buzzing with activity. This influx of people is a boon for local businesses and tourism.
As Pasila continues to evolve, its appeal is only set to grow, making it a prime spot for property investment.
Sources: Messukeskus, Ramboll
2) Rental yields in central Helsinki will fall as property prices rise faster than rents
In recent years, property prices in central Helsinki have been on the rise, with areas like Punavuori, Ullanlinna, and Kamppi seeing significant increases. For example, studios are now priced between €279,000 and €298,900, while 2-bedroom apartments can cost around €700,700. This upward trend in property prices is a key factor in the declining rental yields.
Meanwhile, rental prices have not increased at the same pace as property prices. The average gross rental yield in Helsinki was 3.80%, which is lower than the historical average of 4.24% in Q3, 2023. This indicates that rent increases are not sufficient to keep up with the rising property prices, leading to lower rental yields.
Additionally, historical data shows a trend of declining rental yields in urban areas. For instance, the average gross rental yield in Finland dropped from 4.24% in Q3, 2023, to 4.93% by Q4, 2024. This trend suggests that rental yields are not keeping pace with the rising property prices, further contributing to the decline.
Sources: Global Property Guide, Yle, SKVL Housing Market Forecast
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) Demand for senior-friendly housing in Helsinki will grow as the population ages
Helsinki is seeing a growing demand for accessible and senior-friendly housing due to its aging population.
In 2023, over 100,000 residents in Helsinki were aged 65 and over, making up about 16.7% of the city's population. This number is expected to rise, with projections showing an increase of 15,000 residents aged 75 and over by 2030, and nearly 30,000 more by 2040.
Life expectancy in Finland is also on the rise, with boys expected to live up to 79 years and girls up to 84.2 years as of 2023. This means people are living longer, which further fuels the need for housing that accommodates seniors.
Older adults in Helsinki have expressed a strong desire to age in place, preferring to stay in their own homes as they grow older. They emphasize the need for accessible infrastructure, like safe walking surfaces during winter and more street signs for easy navigation.
These preferences highlight the importance of creating environments where seniors can live independently and safely. The city is responding to these needs by focusing on infrastructure improvements and housing solutions that cater to the elderly.
As Helsinki's population continues to age, the demand for senior-friendly housing will only increase, making it a crucial area for potential property buyers to consider.
Sources: Helsinki Times, Statistics Finland, Urban Age
4) Rents in older buildings will drop as tenants choose homes with modern amenities and energy efficiency
There's a growing trend of tenants favoring modern amenities and energy-efficient homes.
In places like Helsinki, this shift is clear as the city is making strides in sustainable living. They've built the world's largest air-to-water heat pump, which is set to warm about 30,000 homes. This not only cuts down on CO2 emissions but also offers price stability for residents, making these homes more appealing.
Older buildings, on the other hand, often come with higher utility costs due to poor energy efficiency. In Finland, many of these buildings are responsible for a large share of heating emissions, which can be a financial strain for tenants. This has led to a preference for newer constructions that help save on utility bills.
Newer buildings also boast modern features like smart home technology, which are usually missing in older properties. This makes them more attractive to renters, who are increasingly seeking out these conveniences. As a result, there's a noticeable rise in demand for rentals with modern amenities, pushing down rents in older buildings.
Sources: Euronews, European Commission, Caliberco
5) Rents in Helsinki's city center will rise due to high demand and low supply
In recent years, Helsinki's city center has seen a consistent rise in rental prices, largely due to high demand and limited supply. The average gross rental yield in the city center was around 3.80% in 2023, with some areas like Alppila and Kallio showing even higher yields of up to 4.70%. This indicates a strong rental market where demand is outpacing supply.
Helsinki's population growth has been significant, with an increase of almost 11,000 people between 2022 and 2023. This growth is primarily driven by migration, especially work-based immigration, which has added to the demand for housing. The trend of urbanization continues, as more people move to Helsinki for job opportunities and lifestyle benefits, further increasing the demand for housing in the city center.
On the supply side, Helsinki faces constraints due to limited land availability for new developments, particularly in the city center. This limitation is likely to keep the supply of new housing developments low, even as demand remains strong. High occupancy rates in existing rental properties also highlight the high demand for housing, driven by both domestic and international investors attracted to Helsinki's vibrant cultural and economic hub status.
Sources: Global Property Guide, Helsinki Times, City of Helsinki
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6) Rental yields in high-demand areas will stabilize as rent prices align with property values
In the past couple of years, we've seen a noticeable gap between rent prices and property values in Helsinki. For instance, in Q3 2023, the average gross rental yield was 3.8%, with some areas seeing yields as low as 2.84% and others as high as 4.7%. This was partly due to a drop in the average price of old dwellings in Greater Helsinki by 3.95% to €4,577 per square meter, suggesting that property values were not fully aligned with rent prices.
However, recent trends have shown an increase in rental prices. In Q3 2023, private rents in Helsinki rose by 2.3%, and government-subsidized rents increased by 3.4%. This upward trend in rent prices is a sign that they are beginning to catch up with property values. The Global Property Guide also reported that gross rental yields in Finland averaged 4.24% in Q3 2023, indicating a potential stabilization as rent prices rise.
Moreover, the demand for rental properties in Helsinki has been strong, driven by factors such as population growth and a preference for city living. Between 2022 and 2023, Helsinki's population surged by nearly 11,000 people, and the influx of international students and young professionals has further increased demand for housing in high-demand neighborhoods. This strong demand, coupled with limited supply, is pushing rents higher and contributing to the stabilization of rental yields.
Sources: Global Property Guide, Global Property Guide, Credaily
7) More foreign investors will enter Helsinki’s residential market because of Finland’s stable economy and political climate
In recent years, we've seen a noticeable increase in foreign property ownership in Helsinki, particularly from countries like Sweden and Russia. This trend is expected to continue as Finland's economy stabilizes and grows, making it an attractive destination for foreign investors.
Finland has also experienced a rise in foreign direct investment (FDI), which signals the country's growing appeal to international investors. The International Monetary Fund (IMF) has noted that Finland's economy is recovering from recession, with moderate growth projected for 2025. This economic stability is a key factor in attracting more foreign investors.
Moreover, Finland's economic outlook is positive, with growth expected to accelerate to 1.5-2.0% in 2025. This growth is supported by private consumption, exports, and investments, further stabilizing the economy and drawing in foreign investors. Helsinki's property market has shown resilience despite global economic challenges, making it an attractive destination compared to other European cities.
Sources: IMF's Concluding Statement on the Finnish Economy, The Finnish Property Market 2024
8) Interest in Malmi will grow as redevelopment plans enhance its infrastructure and amenities
The Malmi area in Helsinki is experiencing a resurgence in interest, thanks to significant redevelopment plans that have been taking shape over the past few years. In 2023 and 2024, the City of Helsinki initiated several infrastructure projects, including the construction of a new family center, health and well-being center, school, and daycare center. These developments are set to enhance the area's infrastructure and amenities, making it more attractive to residents and investors alike.
Additionally, the Malminkenttä area is undergoing pre-construction work, with street construction plans that began in late 2023. This is part of a broader plan to introduce approximately 13,500 new apartments over the next 25-30 years, which will significantly boost the local housing market. The area is also set to benefit from improved public transportation links, such as the Viikki-Malmi light rail project, which will connect Malmi to the city center and other key locations.
Moreover, the City of Helsinki has outlined a comprehensive redevelopment plan for Malmi, focusing on creating a diverse, high-quality, sustainable urban area with excellent public transport connections. This plan includes the development of new public spaces and amenities, such as parks and recreational facilities, which are expected to attract younger residents and families to the area. As these projects progress, Malmi is likely to see increased foot traffic, business openings, and a positive demographic shift.
Sources: Helsinki News, City of Helsinki Urban Development
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) European buyers will show more interest in the city’s real estate as they seek a safe investment haven
In recent years, Helsinki's real estate market has become increasingly attractive to European buyers looking for a safe investment haven. One of the main reasons is the rising property prices in Helsinki, which have been steadily increasing, especially for newer and well-maintained single-family houses. This trend indicates a strong and growing market, making it appealing for investors.
Another significant factor is the increased foreign investment in Finnish real estate. The Helsinki metropolitan area, in particular, has seen a surge in demand for small apartments and well-maintained single-family homes. This uptick in buyer interest suggests a rejuvenated market, drawing attention from European investors.
Moreover, Finland's high ranking in global safety and stability indexes makes it an attractive destination for those seeking secure investments. Being recognized as the most stable, freest, and safest country in the world adds to its appeal as a safe investment haven.
Helsinki's reputation for high quality of life also plays a crucial role. The city's safety, stability, and high living standards make it an appealing destination for European buyers. Additionally, media reports and industry forecasts have highlighted Helsinki as a safe investment destination, further supporting the notion of increased interest from European buyers.
Sources: Europe Real Estate, Statistics Finland, Helsinki Times
10) Property values will be affected as new environmental rules boost energy-efficient building development
New environmental regulations are set to encourage the development of energy-efficient buildings, which will likely impact property values. In the past, specifically in 2023 and 2024, there was a noticeable increase in government incentives aimed at promoting energy-efficient construction. These incentives were part of an amendment to the Energy Efficiency Directive in Finland, which sought to reduce energy consumption and improve building standards by 2025.
Additionally, there has been a growing number of real estate listings highlighting energy efficiency features. This trend suggests that properties meeting these criteria are becoming more attractive to investors and homeowners. The heightened media focus on green building practices in Helsinki has also played a role in raising awareness and interest in sustainable construction methods.
Moreover, studies have shown that energy-efficient homes tend to have higher resale values. This is largely due to their environmental benefits and the cost savings they offer in terms of reduced utility expenses. As a result, property owners are increasingly motivated to invest in energy-efficient upgrades, further driving the demand for such buildings.
Sources: Castren, Euractiv, OECD
11) Property values will rise in Helsinki's newly connected areas due to public transport expansion
In recent years, Helsinki has seen a significant expansion in its public transport network, which has had a noticeable impact on property values in newly connected areas. Historical data shows that the construction of the Jokeri Light Rail increased apartment prices by 5% more within 800 meters of the stops compared to areas farther away. This trend was observed from 2003 to 2019, indicating a strong link between new transport infrastructure and rising property values.
Case studies from other cities, including Espoo and Helsinki, have shown similar patterns, where the anticipation of new public transport lines has driven up housing prices. This suggests a positive correlation between public transport infrastructure and property values. Additionally, the Helsinki metropolitan area has experienced a significant increase in public transport usage, with 21% of total traveled distance covered by public transport. This growing demand is expected to continue, further driving up property values in areas with improved transport access.
Surveys indicate that buyers in Helsinki prefer properties near public transport due to the convenience and reliability it offers. This preference is reflected in the high demand for residential properties near new public transport links, such as the Jokeri Light Rail. Furthermore, the construction of the Jokeri Light Rail is expected to reduce travel times and increase the capacity of public transport, making it more appealing to potential buyers and enhancing the desirability of properties in newly connected areas.
Sources: Journal.fi, Sitra.fi
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12) More Asian buyers will invest in Helsinki due to its educational opportunities and high quality of life
Helsinki is becoming an attractive destination for foreign buyers from Asia, largely due to its educational opportunities and quality of life. The University of Helsinki, a top institution in Finland, has been drawing international students, including many from Asia, thanks to its supportive academic environment and high standards.
Moreover, the number of Asian expatriates in Helsinki is on the rise. By 2030, Asian languages are expected to be the most common among foreign-language speakers in the city, indicating a growing community from Asia. This trend is supported by Helsinki's high rankings in global quality of life indices, which highlight the city's cultural and educational offerings.
Additionally, media coverage often praises Finland's education system as one of the best globally, which could further attract Asian families seeking quality education for their children. Helsinki's reputation for safety and stability also makes it an appealing choice for families considering relocation.
Sources: EduRank, City of Helsinki, World Cities Culture Forum
13) Rental yields in Helsinki will dip slightly as new developments boost supply
In recent years, Helsinki has seen a noticeable increase in the number of building permits issued. This uptick is largely due to the Finnish Government's proposals to amend the Building Act, which aims to track and mitigate the carbon footprint of buildings. Such changes have spurred construction activity, leading to a potential rise in the supply of rental properties.
Additionally, the Finnish Real Estate Agents Association (SKVL) has observed a surge in new residential developments, particularly small apartments and well-maintained single-family houses. This increase in new developments is expected to meet the growing demand, but it also raises concerns about potential oversupply in the rental market.
Moreover, the City of Helsinki's rental company, Heka, plans to increase rents due to high interest rates and vacant apartments, indicating a growing inventory of rental properties. This situation is further compounded by the Helsinki Research Forum's findings, which show a slight increase in vacancy rates in key office areas, suggesting a potential decrease in rental price growth rates.
Media reports highlight ongoing and planned housing projects, such as We Land in Ruoholahti and Ilmalan Aura in Pasila, which will add significantly to the rental property inventory. This expansion could lead to a decline in rental yields as the market adjusts to the increased supply.
Sources: Avance, Europe Real Estate, YLE
14) Demand for affordable housing will rise as the immigrant population in the city grows
Helsinki's immigrant population has grown to 17% by 2023, fueling the need for affordable housing.
In Helsinki, many immigrants prefer renting over buying, with over half living in rented homes. This is especially true in areas like eastern Helsinki, where rental demand is high.
Immigrants often earn less than native residents, making affordable rental housing essential for them. This financial reality pushes many to seek budget-friendly living options.
Neighborhoods with a high concentration of immigrants, such as eastern Helsinki, see a particularly strong demand for rentals. This trend highlights the need for more affordable housing solutions.
For many immigrants, renting is not just a preference but a necessity due to lower average income levels. This economic situation drives the search for affordable housing.
As Helsinki's immigrant population continues to grow, the demand for affordable housing options will likely increase, shaping the city's housing market.
Sources: Helsinki.fi, Housing2030.org
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) Rental yields in suburban areas will rise as more people look for affordable living outside city centers
In recent years, we've seen a noticeable shift in where people choose to live, especially around Helsinki. As rental prices in the city center have risen, many have started looking for more affordable options outside the city. This trend has been particularly evident since 2023 and 2024, when the average gross rental yield in Helsinki city center was lower compared to suburban areas like Lahti, where it reached 7.40%.
One of the main reasons for this shift is the increasing demand for affordable housing. People are drawn to suburban areas because they offer larger living spaces at lower costs, which is especially appealing to families. Improved public transportation has also made commuting from the suburbs to the city center much easier, further enhancing the attractiveness of suburban living.
Additionally, the rise of remote work has given people more flexibility in choosing where to live. This has allowed many to move to suburban areas where they can enjoy more space and lower living costs. As a result, new residential developments have been popping up in these regions to meet the growing demand, often featuring single-family homes and build-to-rent properties.
Sources: Global Property Guide, TenantCloud
16) Demand for homes with office spaces and fast internet will grow due to remote work
Remote work has become a major trend in Helsinki, especially in 2023 and 2024.
In Finland, 35% of wage and salary earners are now working remotely, according to Statistics Finland. This shift is pushing people to look for homes that fit their work-from-home lifestyle better.
High-speed internet is a must for remote work, and Finland has been ahead of the game. By 2015, over 99% of the population had access to superfast broadband, making it easier for remote workers to stay connected and productive.
There's also a growing trend for homes with dedicated office spaces. Many professionals want jobs that let them work from anywhere, so they need homes that support this lifestyle. Real estate market reports show a demand for properties with extra rooms or flexible layouts for home offices.
Consumer surveys highlight this preference for dedicated workspaces at home. People are increasingly looking for homes that can accommodate their professional needs, reflecting a shift in how we view living spaces.
As remote work continues to grow, the demand for homes with these features is likely to increase, making it a key consideration for potential buyers. Homes with high-speed internet and office spaces are becoming more desirable in the real estate market.
Sources: Statistics Finland, Phys.org, Fast Company
17) Property prices in Helsinki's suburbs will rise steadily as remote work remains popular
In recent years, particularly in 2023 and 2024, we've seen a significant shift in how people work, with remote work becoming a more permanent fixture in many industries. This change has led to a growing demand for larger living spaces, as people need room for home offices, gyms, and other amenities. Suburban areas, where such spaces are more readily available, have become increasingly attractive, driving up property prices.
In Finland, remote work statistics from 2023 showed that about 35% of wage and salary earners worked remotely. This sustained interest in remote work has continued to influence housing demand, as people seek homes that can accommodate their new work-from-home lifestyles. Additionally, surveys have shown that remote workers prefer suburban living, where they can find larger living areas and dedicated office spaces.
The reduced necessity for daily commutes to city centers has also played a role in this trend. With more people working from home, there's less demand for traditional office spaces in urban areas, making suburban living more appealing. Real estate developers have responded by investing in amenities that cater to remote workers, further increasing the attractiveness of suburban properties.
Sources: Statistics Finland, Minut Blog, UNECE
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.