Housing market

From January to September, housing market activity was 13% lower than in the previous year, and home prices continued to fall. Homes are still taking a long time to sell – around four months on average – although the selling times have shortened slightly in recent months.

“The war in Iran has been the main factor affecting the market, pushing up energy prices, inflation and interest rates,” says Juho Kostiainen. The European Central Bank (ECB) has raised its policy rates twice, and the 12-month Euribor has climbed above 3%.

Home price trends are highly mixed. Nationwide, prices fell by 3.9% year on year in the second quarter. “Prices of smaller homes in particular have continued to fall sharply, driven by a substantial increase in supply and weak demand from investors,” Kostiainen notes.

At the same time, the Finnish economy is finally back on a growth track, and consumer confidence has recovered to near its long-term average.

We expect home prices to continue falling for the remainder of the year. We forecast that prices will fall by 3% in 2026 before returning to 1% growth in 2027. In 2028, we expect price growth to accelerate to 2.5%.

In Rovaniemi and Kokkola, prices have already begun to rise, and in Vaasa and Oulu, they are no longer declining.

We expect two more rate hikes from the ECB. These have already been priced in by the market, and we don’t expect the 12-month Euribor to rise significantly from its current level. 

The Finnish economy is expected to continue growing next year, supporting activity in the housing market.