Authored by the expert who managed and guided the team behind the Finland Property Pack
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What is happening in Helsinki’s real estate market? Are prices on the rise or decline? Is the city still attracting international investors? How are local government policies shaping real estate dynamics in 2025?
These are the questions we hear every day from professionals, buyers, and sellers across Helsinki and beyond. Maybe you’re curious about the same things.
We know this because we stay closely connected with local experts and people like you, exploring the Helsinki real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
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1) Central Helsinki rental yields will dip slightly as property prices rise faster than rents
In recent years, particularly in 2023 and 2024, property prices in central Helsinki have been on the rise. This increase is evident from the average cost of purchasing a property, which stands at approximately €6,960 per m². Such a substantial rise in property prices has been driven by factors like a sharp drop in new housing construction and rising interest rates, leading to fewer property transactions and higher prices.
On the other hand, rental prices have not kept pace with the rapid increase in property prices. For instance, in Q3 2023, the average monthly rent rose modestly by 2.2% from the previous year. This slower growth in rental prices compared to property prices has been a consistent trend, contributing to a decrease in rental yields over time.
Historical data supports this trend, showing a decline in rental yields. In Q3 2023, the average gross rental yield in Helsinki was around 3.8%, which is lower than previous periods. This decline is further highlighted by reports from real estate agencies, which note that despite increased demand for small apartments, the high property price-to-rent ratio has not significantly impacted rental yields.
Sources: Global Property Guide, Europe Real Estate, Relocate.me
2) Property values in Kalasatama will rise as the Redi shopping center becomes a central hub
The Kalasatama area is poised for a rise in property values as the Redi shopping center becomes a central hub. In the past, Redi, completed in 2018, has been a significant retail destination with its 175 shops and 43 restaurants, drawing increased foot traffic and consumer spending. This bustling activity around Redi makes the area more attractive to potential residents and investors.
In 2023, despite a general low in property transaction volumes across Finland, Kalasatama stood out with significant activity. A notable transaction involved US investor KKR acquiring 1,200 rental apartments, indicating strong interest in the area. This trend mirrors other Helsinki neighborhoods like Kallio and Punavuori, where similar developments have led to high property value increases due to limited housing stock and growing demand.
Moreover, the Kalasatama-Pasila Project has enhanced public transportation links, connecting Kalasatama to Pasila in just 15 minutes. This improvement in accessibility supports the area's appeal, aligning with Helsinki's vision of being the most functional city in the world. Such infrastructure investments are crucial in boosting property values as they make the area more livable and convenient.
Additionally, Kalasatama's reputation as a desirable residential area has been bolstered by eco-friendly urban projects and new amenities like schools and parks. These developments attract families and young professionals, contributing to demographic shifts that favor property value growth. The ongoing urban development and infrastructure investments further solidify Kalasatama's potential as a prime real estate location.
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) Property prices in outer suburbs will rise moderately with better transport links
In recent years, Helsinki has made significant investments in public transport infrastructure, such as the expansion of light rail lines. For example, the Raide-Jokeri line connects various key areas, enhancing accessibility and making outer suburbs more appealing to potential homeowners.
We've seen a pattern where areas with improved transport links, like the Soukka neighborhood in Espoo, have experienced rising property prices. This trend is largely due to the completion of projects like the Länsimetro extension, which has made these areas more attractive to buyers.
Real estate agents have observed a shift in demand towards suburbs with better transport connectivity. This shift is driving up property prices, as more people are interested in living in areas that offer convenient commuting options. Improved transport links, such as those planned in the Helsinki Regional Transport System Plan, are expected to continue this trend.
Sources: Rail Journal, Helsinki City, Helsinki Times
4) Helsinki’s property prices will stabilize following a period of rapid growth
Helsinki's property market is showing signs of stabilizing after a period of rapid growth.
In the third quarter of 2023, the average price of old dwellings in Greater Helsinki dropped by 3.95%, marking the fifth consecutive year of price decline. This trend suggests that the once skyrocketing prices are now cooling off.
By the end of October 2023, over 6,100 new apartments were completed in Helsinki. While this number didn't hit the target, it reflects a strong push to increase housing supply, which can help balance the market.
Government policies are also influencing the market. The decision to stop granting interest-subsidized loans for new right-of-occupancy housing is affecting the construction market, potentially stabilizing supply and demand dynamics.
Rising interest rates are making mortgages less affordable, which can slow down property price growth by reducing demand. This financial shift is crucial for potential buyers to consider.
Consumer surveys reveal a growing interest in small apartments, indicating a shift in housing demand. This change can help distribute demand more evenly across different property types, contributing to market stability.
Sources: Global Property Guide, Yle, Europe Real Estate
5) City center rents will rise moderately due to limited supply and high demand
Helsinki's city center rental market is buzzing due to a mix of limited supply and high demand.
With more people moving to the Helsinki Metropolitan Area, the demand for rentals has skyrocketed. This surge is fueled by the need for urban services and the scarcity of prime logistics spaces. Even though new office spaces popped up in 2023, housing construction hasn't kept up, making the rental scene fiercely competitive.
Many properties now get multiple offers, and rising property prices are pushing people towards renting instead of buying. The dream of owning a home is slipping away for some, nudging them to explore rental options.
Surveys show that nearly half of the folks in the Helsinki Metropolitan Area want to live right in the city center. This urban living trend, coupled with economic growth pulling more workers to the area, is cranking up the demand for rentals even more.
As a result, rents in the city center are expected to rise moderately. The limited supply can't keep up with the high demand, making it a landlord's market.
Sources: Europe Real Estate, Trepo, STT Info
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6) Virtual reality tours will become popular in property viewings, appealing to tech-savvy buyers
Virtual reality tours are becoming a big hit in property viewings, especially for tech-savvy buyers.
By 2025, the VR real estate market is expected to be worth $2.6 billion, highlighting its growing popularity worldwide. In Helsinki, this trend is particularly noticeable because nearly 98% of Finns use the internet, and over 83% are active on social media, making them prime candidates for digital innovations.
In 2023, surveys showed that more than half of adults globally had experienced a virtual tour, and 67% of home buyers wanted virtual tours when looking at properties. This demand is especially strong among younger buyers, aged 18 to 34, who are 130% more likely to book a showing if a virtual tour is available.
Helsinki's real estate agencies are catching on, offering VR tours that use AI for room measurements and let users customize their experience. Homes with VR tours can sell for up to 7.25% more and move faster, with nearly half of potential buyers willing to make an offer based solely on a virtual tour.
Finland's robust tech industry supports these innovations, with a high number of active mobile subscriptions and a significant portion of the population making online purchases. This tech-friendly environment makes VR tours a natural fit for the Finnish real estate market.
As VR technology advances, with features like predictive analytics and cognitive computing, these tours are becoming more interactive and personalized, enhancing the buying experience. This is a game-changer for the real estate market, especially in tech-forward cities like Helsinki.
Sources: PhotoUp, Helsinki Times, EZ Real Estate Tools
7) Pasila will draw more investors with the Tripla complex offering residential and commercial spaces
The Pasila district is set to attract more investors with the completion of the Tripla complex, which offers a mix of residential and commercial spaces. This development has transformed Pasila into a vibrant and accessible area, making it easier for people to live and work there. In 2020, Pasila saw 80,000 railway passengers and 40,000 bus and tram passengers daily, highlighting the high demand for both residential and commercial spaces.
The success of Tripla as a mixed-use development is a strong indicator of investor interest in similar projects. The combination of a shopping mall, residential areas, and a public transportation hub makes Pasila an attractive location for investors. Major financial institutions like the European Investment Bank and the Nordic Investment Bank have shown confidence by financing the project.
By 2025, Pasila's railway station is expected to handle 130,000 passengers and 900 trains daily, making it one of the busiest interchanges in the HSL area. This high foot traffic ensures a thriving commercial environment, further attracting investors. The area's development into a versatile service producer, supported by the cooperation between Helsinki Expo and Convention Centre and Mall of Tripla, suggests increased interest from potential homebuyers and renters.
Sources: Tripla Transport Hub, Castren & Snellman, Messukeskus
8) Areas with strong airport transport links will see increased foreign interest
Foreign interest in areas with strong transport links to the airport is likely to grow for several reasons. First, rising property prices in areas like Vantaa, especially Tikkurila, show that proximity to Helsinki Airport is a key factor driving demand. This trend suggests that people value easy access to the airport, which can make these areas more attractive to foreign buyers.
Additionally, increased foreign investment in real estate near major transport hubs, such as Finavia's plan to acquire a majority stake in AVIA Real Estate, indicates a growing interest in properties with strong transport links. This kind of investment often signals confidence in the area's potential for growth and development, making it appealing to international investors.
Moreover, the growth in tourism and business travel statistics in Helsinki, with a significant increase in international visitors, highlights the city's appeal to foreign travelers. As Helsinki aims to be the world’s most sustainable travel destination, this focus on sustainability could further attract foreign interest, especially in areas with convenient airport access.
Sources: Finavia, City of Helsinki, STT Info
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) Helsinki's tech-friendly neighborhoods will attract more interest from foreign buyers
Foreign buyers are increasingly eyeing Helsinki's tech-friendly neighborhoods for their next property investment.
In recent years, Finland has seen a surge in foreign investment, with billions flowing into the country. This trend is particularly noticeable in Helsinki, where tech-friendly areas are catching the attention of international investors. The city's reputation as a digital leader, bolstered by its win in the Digital Cities category, is a major draw for those interested in tech-enabled living.
Helsinki's innovative projects, like its digital twin model, are not just buzzwords; they are attracting global tech talent and making the city a hotspot for tech companies. This influx of talent and businesses is making these neighborhoods even more appealing to foreign buyers who want to be part of a thriving tech ecosystem.
Social media is buzzing with Helsinki's vibrant tech scene, and media outlets are highlighting the city as a tech hub. These factors are increasing the visibility of Helsinki's tech-friendly neighborhoods, making them more attractive to potential buyers. Collaborations with international tech firms further cement Helsinki's status as a digital innovation leader, drawing in more foreign interest.
In areas like the Kalasatama district, property prices are on the rise, reflecting the growing demand from both local and international buyers. This trend suggests that foreign buyers are indeed keen on investing in these tech-centric neighborhoods.
With Helsinki's commitment to digital innovation and its growing reputation as a tech hub, it's no wonder that foreign investors are flocking to the city. The combination of a thriving tech scene and rising property values makes these neighborhoods a smart choice for those looking to invest in the future.
Sources: Statistics Finland, Forum Virium Helsinki, Real Estate Investment Q4 Report
10) Updated property tax laws will make investing in Helsinki more appealing
Helsinki is becoming a hotspot for property investors thanks to recent changes in property tax laws.
One major change is the reduction in transfer tax rates, which means lower upfront costs for buyers. The Finnish Government cut the transfer tax on real estate from 4% to 3% and on shares in housing companies from 2% to 1.5%. This makes investing in Helsinki more financially appealing.
Finland's property tax is also quite low compared to other European countries, at just 0.37% of private capital stock. This low tax burden is a big draw for investors looking for better returns, making Helsinki a more attractive option than cities with higher property taxes.
The Finnish Government aims to revitalize the housing and real estate market with these tax cuts, especially after the pandemic slowdown. By making property investment more appealing, they hope to boost economic growth and attract more foreign investors.
While specific data on increased foreign investment isn't available, the lower tax rates are expected to lure international buyers to Helsinki's property market. This could lead to a more vibrant and competitive real estate scene.
Sources: Castren, Tax Foundation
11) A growing multicultural population will boost demand for diverse housing options in the city
Helsinki's population has been growing rapidly, with projections indicating it will exceed 700,000 by 2027. This growth is largely driven by international migration, which has significantly increased the city's multicultural population.
In 2020, 17% of Helsinki's residents had an immigrant background, showcasing a substantial rise in cultural diversity. This trend is expected to continue, with foreign migration being a major factor in the city's projected population increase of over 230,000 residents by 2060.
As the multicultural population grows, there is a corresponding need for diverse housing options. Housing developments in areas like Kalasatama and Central Pasila are being designed to meet these needs, accommodating the cultural preferences and requirements of a diverse population.
Sources: Helsinki Times, Fennia Journal, City of Helsinki
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12) City center property prices may dip slightly as more people opt for suburban living
In recent years, we've seen a noticeable shift in where people want to live, especially in places like Helsinki. Back in 2023, there was a significant population increase in suburban areas, with neighborhoods such as Pohjois-Pasila experiencing a surge of 1,200 new residents. This trend continued into 2024, with areas like Jätkäsaari, Kalasatama, and Sompasaari each welcoming about 500 new people.
One of the main reasons for this shift is the increased availability of housing in the suburbs. New housing projects have been popping up, and the expansion of the light rail network has made suburban living more appealing. Improved public transportation, like the Raide-Jokeri line, has made it easier for people to commute from the suburbs to the city, accommodating up to 80,000 passengers daily.
Additionally, consumer surveys have shown that people, especially millennials, prefer larger living spaces and greener environments, which are more common in the suburbs. The rise of remote work has also played a role, as it reduces the need for people to live close to city centers. This has led to a decline in demand for city-center properties, with property transactions dropping significantly in 2023.
Sources: Helsinki Times, Rail Journal, CBRE Investment Management
13) Suburban rental yields will rise as family demand increases
In recent years, we've seen a noticeable trend of families moving to suburban areas around Helsinki. This shift is partly due to the net domestic migration rate, which saw a positive increase of 2,000 people during the first half of 2024, surpassing the numbers from 2023. This suggests that more families are choosing to settle in the suburbs, seeking a balance between city life and the benefits of suburban living.
One of the key reasons for this migration is the rising property prices in urban centers like Helsinki. As these prices climb, families are looking for more affordable housing options, which they often find in suburban areas. This search for affordability is driving up the demand for rental properties in these regions, leading to higher rental yields.
Additionally, the city of Helsinki has been actively developing family-friendly amenities and services in suburban areas, making them more attractive to families. Improved public transportation links, such as new metro lines and bus routes, have also made it easier for families to enjoy the benefits of suburban living without sacrificing the conveniences of the city.
Sources: Global Property Guide, City of Helsinki News, City of Helsinki News
14) Short-term rental yields will rise in tourist-heavy areas like Katajanokka
Helsinki's tourism boom in 2023 saw over 4 million overnight stays, marking a 10% rise from the previous year.
With international visitors from places like Japan, China, and Hong Kong increasing by over 20%, Helsinki's appeal is clearly on the rise. This influx is particularly noticeable in tourist-heavy areas such as Katajanokka.
Short-term rentals in Helsinki are thriving, with an average occupancy rate of 71% and a daily rate of €88. This high demand makes Katajanokka a hotspot for rental yields, attracting both tourists and investors.
Platforms like Airbnb have expanded significantly, boasting 2,861 active listings as of September 2024. Hosts in Helsinki typically earn around €22,000 annually, highlighting the profitability of short-term rentals.
Investing in areas like Katajanokka is becoming increasingly attractive due to the steady flow of tourists. Rental yields are expected to rise as more visitors choose this vibrant district for their stay.
For those considering property investment, Katajanokka offers a promising opportunity with its growing popularity and stable rental income potential.
Sources: Helsinki News, Airbtics, Theseus
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) Helsinki's eco-friendly developments will attract European buyers
European buyers are increasingly drawn to Helsinki's eco-friendly developments because of the city's strong commitment to sustainability.
In recent years, areas like Eco-Viikki have shown impressive sustainability achievements, such as reducing urban runoff pollution and conserving native habitats. These efforts make Helsinki an attractive option for those seeking environmentally conscious living spaces.
Moreover, the transformation of districts like Kalasatama and Pasila into smart city hubs highlights Helsinki's focus on sustainable living and advanced technology. These developments offer a modern urban lifestyle while prioritizing eco-friendly practices, appealing to European buyers who value sustainability.
Additionally, the Finnish government's incentives for energy-efficient home upgrades, such as the ELY and ARA grants, enhance property values and make eco-friendly homes more appealing. This financial support, combined with Helsinki's global recognition as a leader in urban sustainability, further attracts European buyers interested in sustainable investments.
Helsinki's commitment to sustainability is evident in its urban planning, where green spaces are integrated into city designs, offering residents a balance between urban living and nature. This approach not only improves the quality of life but also increases the city's appeal to environmentally conscious buyers.
With a focus on reducing carbon footprints, Helsinki's developments often include energy-efficient buildings and renewable energy sources, making them a top choice for those looking to invest in sustainable properties.
Sources: City Pulse, 21st Century Development, Nuveen
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.