Is buying a property in the center of Helsinki a good investment?

Last updated on December 7, 2023

Yes, the analysis of Helsinki's property market is included in our pack

If you've explored the bustling city center and urban amenities in Keskusta, Helsinki, you may have contemplated investing in a property in the heart of the Finnish capital, experiencing the convenience and vibrant atmosphere it offers as a resident.

Is it a good idea though? How is the real estate market there? Are prices going up or going down? Do people make profits on their real estate investments? What about the rental demand?

We'll answer all these questions for you! When building and updating our property pack for Finland, our team has been researching and surveying this area. Actually, lots of customers are interested in investing there. So we thought it would be a good idea to add some information about it in our pack.

Why do property buyers like investing in the center of Helsinki?

Keskusta, the heart of Helsinki, stands out as a highly desirable location for property buyers for several reasons.

Its popularity as a real estate hotspot is not a sudden phenomenon; rather, it has been steadily growing over the years, particularly since the early 2000s.

This growth can be attributed to a blend of historical charm, modern amenities, and a strategic location that offers a unique living experience compared to other areas in Helsinki and beyond.

One of the most appealing aspects of Helsinki City Centre is its rich cultural and historical heritage. The area is dotted with architecturally significant buildings, museums, and theaters, making it an aesthetically pleasing and culturally rich place to live.

This is quite distinct from newer residential areas in Helsinki, which may lack this historical depth.

Moreover, Helsinki City Centre is the hub of Helsinki's business and commerce. This makes it an ideal location for professionals who prefer a short commute. The convenience of having offices, retail spaces, and recreational facilities within walking distance is a significant draw.

In contrast, suburban areas, while possibly quieter and more spacious, don't offer this level of convenience and urban vibrancy.

The popularity of Helsinki City Centre is also driven by its well-developed infrastructure. It boasts excellent public transportation facilities, including trams, buses, and the metro, making it easily accessible.

This level of connectivity is a significant advantage over more peripheral areas of Helsinki, where public transport options might be more limited.

This area attracts a diverse group of people, including young professionals, expatriates, and affluent individuals who are drawn to the blend of urban lifestyle and cultural richness. The area's bustling nightlife, array of dining options, and shopping centers cater to a wide range of tastes and preferences.

However, it's important to acknowledge some potential drawbacks of living downtown. The area can be quite busy and noisy, which might not be ideal for those seeking a more tranquil environment.

Additionally, the cost of living and real estate prices in Helsinki City Centre are among the highest in Helsinki, making it less accessible for budget-conscious buyers.

In terms of the future, while it's difficult to predict with certainty, the ongoing developments and investments in the area suggest that Keskusta's appeal is likely to persist.

However, as with any real estate market, changes in economic conditions and urban development policies could influence its attractiveness over time.

So, if you're considering the center of Helsinki for your next property purchase, weigh these factors carefully. The area offers a unique blend of urban living, cultural richness, and convenience, but this comes with a higher price tag and the hustle and bustle of city life.

Make a profitable investment in Helsinki

Better information leads to better decisions. Save time and money. Download our guide.

Why is Helsinki City Centre a nice place to live?

Living in the middle of Helsinki offers a lifestyle that's both vibrant and comfortable, making it a sought-after location.

The area's culture is a mix of historical charm and modern urban living, creating an environment that's both culturally rich and conveniently modern.

In terms of lifestyle and culture, Keskusta is the heart of Helsinki's cultural scene. It's home to several prominent landmarks, museums, and theaters, such as the Ateneum Art Museum and the National Theatre.

This cultural richness provides residents with an ever-present opportunity to engage in a variety of cultural activities. The area's architecture, ranging from neoclassical to contemporary, adds to its unique charm.

The expat community in Helsinki, especially downtown, is quite vibrant, thanks in part to the area's central location and the amenities it offers. This makes it a popular choice for foreigners working in Helsinki.

The community is well-integrated, with various international clubs and events, which helps newcomers settle in and feel at home.

However, living in the center does come with a higher cost. Being the central district, housing prices and the cost of living tend to be higher than in other parts of Helsinki. This might be a consideration if you're budget-conscious. But many find the convenience and quality of life to be worth the extra expense.

Safety is another appealing aspect. Helsinki, in general, is known for its high safety standards, and the center is no exception. The area is well-patrolled and maintains a low crime rate, making it a safe place to live, work, and enjoy leisure activities.

When it comes to amenities and facilities, Helsinki City Centre is well-equipped. There are several schools, including international options like the International School of Helsinki, which cater to the diverse community.

For healthcare, there are facilities like Töölö Hospital and various private clinics offering high-quality medical care. Shopping enthusiasts will appreciate the range of options, from the Stockmann department store to smaller boutiques and local markets.

The quality of infrastructure is top-notch. Roads are well-maintained, and utilities like electricity, water, and internet connectivity are reliable and of high quality. Helsinki is known for its excellent internet infrastructure, so connectivity is generally not an issue.

Accessibility is another key advantage of living there. It's well-connected to other parts of Helsinki and major transport hubs. Helsinki Central Station, the main railway station, offers easy access to other Finnish cities and the airport.

The public transportation system is efficient and includes buses, trams, and the metro, making it easy to navigate the city without a car.

How much does it cost to buy real estate in the center of Helsinki?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Finland.

Buying property in Helsinki City Centre can vary greatly in cost depending on several factors including the type of property, its location, and its features.

The residential properties predominantly consist of apartments, which range from compact studio units to spacious multi-bedroom apartments. Houses and luxury villas are less common in this densely built urban area, but they do exist, particularly on the fringes of the district.

Apartments are the most in-demand type of property. This demand is driven by the district's central location, its proximity to cultural, commercial, and entertainment centers, and the appeal of urban living.

The convenience of having amenities and workplaces within walking distance makes apartments here particularly attractive to professionals, expatriates, and those seeking an active city lifestyle.

Regarding the property market, Helsinki City Centre offers a mix of both resale properties and new developments. The new developments tend to be high-end, featuring modern amenities and often targeting the luxury market segment.

However, the majority of available properties are resales, many of which are in historic buildings that offer their own unique charm and character.

The price range for properties in the center of Helsinki is generally higher compared to other areas of Helsinki. Prices per square meter can vary widely, but they are typically in the higher brackets of the city's property market.

The exact figures fluctuate, but it's not uncommon to see prices well above the city average due to the area's high demand and prestigious status.

Over recent years, property values in Helsinki City Centre have shown a steady increase. This trend has been fueled by the ongoing attractiveness of central Helsinki, the general trend of urbanization, and the limited availability of new land for development in the area.

This steady growth in property values indicates a healthy demand for properties there.

Looking to the future, there may be developments or city planning changes that could impact property values. Any new developments, particularly those that add amenities or enhance the area's infrastructure, could increase the attractiveness of Keskusta and, consequently, its property values.

Additionally, Helsinki's ongoing efforts to improve sustainability and livability, such as enhancing green spaces or improving public transportation, could also positively impact property values in the area.

Predicting the real estate market in the coming years suggests a continued interest in this central district.

The consistent demand for properties, combined with limited space for new development, is likely to keep property values high.

Factors that indicate a potential increase in value include the ongoing urbanization trend, the area's popularity among expats and professionals, and Helsinki's overall stability and growth as a city.

If you're considering investing in property in Keskusta, these factors suggest that it could be a wise decision. The area's appeal, combined with the steady growth in property values, makes it an attractive option for both residential and investment purposes.

However, as with any real estate investment, it's important to consider your personal circumstances and consult with real estate professionals to make an informed decision.

Where is the best area to buy a property in Helsinki City Centre?

When considering the best area to buy a property in the center it's important to understand that different parts of this central district offer varied atmospheres, property types, and price ranges.

Keskusta, being the heart of Helsinki, encompasses several distinct neighborhoods, each with its own unique character.

One area that stands out is the neighborhood around Esplanadi Park. This area is known for its beautiful, historic buildings and proximity to some of Helsinki's finest shops and restaurants. Properties here tend to be on the higher end of the price spectrum, reflecting the prestigious nature of the location.

The atmosphere is lively yet elegant, making it a sought-after location for those who enjoy being at the center of city life.

Another notable area is Punavuori, known for its bohemian and artistic vibe. This neighborhood offers a mix of old and new properties, including charming old buildings and modern developments.

Prices in Punavuori can be slightly more affordable than in the most central parts, yet it still offers the convenience and appeal of city center living.

It's a great area for those who appreciate a creative and vibrant neighborhood. An up-and-coming area is the district surrounding the Helsinki Design District.

This area has been gaining popularity due to its focus on design and arts, attracting a younger, trendier crowd. Investment in properties in this area could be promising, considering the growing appeal and ongoing development.

On the contrary, certain parts, particularly those closer to the central railway station, might be less advisable for some buyers. These areas can be quite busy and noisy, with a high concentration of commercial and tourist activity.

While this might be appealing for some, others might prefer a more tranquil residential environment.

When looking for a property in Helsinki City Centre, consider areas like Töölö and Eira. Töölö is known for its beautiful parks and cultural institutions, offering a more peaceful yet still central living experience.

Eira, on the other hand, is known for its beautiful seaside and Art Nouveau buildings. Both areas offer a high quality of life with a slightly different character from the very heart.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Finland.

Area	Atmosphere	Property Types	Price Range	Notes
Esplanadi Park Area	Lively, Elegant	Historic Buildings	High	Prestigious, close to shops and restaurants
Punavuori	Bohemian, Artistic	Mix of Old and New	Moderate	Vibrant neighborhood, more affordable
Helsinki Design District	Trendy, Young	Varied	Varies	Up-and-coming area, focus on arts
Near Central Railway Station	Busy, Commercial	Varied	Varies	High tourist activity, less tranquil
Töölö	Peaceful, Cultural	Varied	Moderate to High	Close to parks and cultural institutions
Eira	Seaside, Art Nouveau	Historic Buildings	High	Beautiful seaside area, quiet

Don't lose money on your property in Helsinki

100% of people who have lost money in Finland have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Is there a strong rental demand in Helsinki City Centre?

There is indeed a strong demand for rental properties.

The demand encompasses both short-term and long-term rentals, but each has its own target demographic and distinct characteristics.

For short-term rentals, the demand is primarily driven by tourists and business travelers. Keskusta, being at the heart of Helsinki, is a prime location for visitors who wish to stay close to major attractions, restaurants, and business centers.

Properties that are most sought-after for short-term rentals are furnished apartments, often with modern amenities. These properties are especially attractive if located near popular sites like Esplanadi Park, the Design District, or close to major transport hubs like the Helsinki Central Station.

On the other hand, long-term rentals in the heart of the town attract a different demographic. These are typically professionals working in Helsinki, expatriates, or students attending nearby universities.

For long-term rentals, tenants often look for unfurnished or semi-furnished apartments, offering a blend of comfort and functionality. The most desirable properties for this group are one or two-bedroom apartments, which provide a balance between space and affordability.

The profiles of potential tenants in vary. Professionals and expatriates usually seek properties that offer convenience and a high standard of living.

They might prefer modern apartments with amenities like a gym, high-speed internet, and proximity to public transport. Students, on the other hand, may prioritize affordability and look for smaller, more budget-friendly options.

Certain amenities can significantly help to reduce vacancy in rental properties. Features like a balcony, sauna, or a well-equipped kitchen can be particularly appealing. Proximity to green spaces, supermarkets, and public transportation also adds to a property's attractiveness.

These amenities meet the day-to-day needs of tenants and enhance the overall living experience, making the property more desirable.

Regarding potential returns on investment, properties in Helsinki City Centre can be quite lucrative, especially given the strong and consistent rental demand.

While exact numbers vary, the return on investment can be attractive, particularly for well-located and well-maintained properties. The high demand in the area tends to keep rental yields healthy, but it's important to factor in the higher acquisition costs in this sought-after district.

In terms of property types gaining more demand and potentially offering better yields, smaller apartments (like studios and one-bedrooms) are increasingly popular, especially among young professionals and students.

These properties tend to have lower vacancy rates and can offer relatively higher rental yields due to their affordability and appeal to a broad tenant base.

Make sure you understand the real estate market in Helsinki

Don't rush into buying the wrong property in Finland. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

Is it easy to buy a property as foreigner in Helsinki?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Finland.

Buying a property as a foreigner in Helsinki, is relatively straightforward, but there are certain nuances and considerations that one must be aware of.

Firstly, in Finland, there are no specific regulations or restrictions that apply exclusively to foreign buyers. This means that foreigners have the same rights to buy property as Finnish citizens.

However, non-EU citizens might need to get approval from the Ministry of Defence for purchasing certain types of property, particularly if they are located in strategic areas or near national borders. This is generally not a concern for properties in this central urban area.

The purchasing process in Finland involves several steps. It typically starts with finding a suitable property, followed by making an offer. Once the offer is accepted, a preliminary contract is signed, and a deposit (usually around 4-10% of the purchase price) is paid.

The final sale is completed upon signing the deed of sale, at which point the remainder of the funds is transferred, and the buyer takes possession of the property.

One of the primary risks associated with property investment in Finland, as with any major city, is the potential for fluctuations in the real estate market. Prices in central urban areas can be subject to larger swings based on economic factors, changes in demand, and other external influences.

Additionally, as Keskusta is a highly sought-after area, prices tend to be higher, which means a larger initial investment.

A classic pitfall for foreigners buying property in Finland can be the lack of familiarity with the local real estate market and legal processes. Unique to Finland is the concept of 'housing company shares' (asunto-osakeyhtiö) for apartments.

When you buy an apartment in Finland, you're actually buying shares in the housing company that owns the building, which entitles you to the exclusive right to use the apartment. Understanding the specifics of this system is crucial.

Working with a local real estate agent or lawyer is highly recommended, especially for foreign buyers.

They can provide valuable insights into the local market, assist with navigating the legal intricacies of the Finnish property system, and ensure that all necessary steps are correctly followed.

Common exit strategies for property investors in Helsinki include selling the property for capital gains or renting it out for a steady income stream.

The high demand for rental properties in central Helsinki can make renting out an attractive option, providing regular income while potentially benefiting from long-term appreciation in property value.