Housing market

The recovery in housing sales has continued this year, but abundant supply is still keeping selling times long and prices on the decline.

Overall, the situation for homebuyers is currently good.

“The cost of homeownership relative to the average salary has decreased over the past two years, as home prices and interest rates have fallen while wages have risen,” notes Juho Kostiainen, our economist who prepared the review. 

However, unemployment and weak consumer confidence continue to dampen buyer interest.

Read the entire autumn housing market review(in Finnish)

The prices of homes have performed poorly in the past few years. Home prices nationwide have fallen by 12% from the peak in June 2022. 

Over the past year, the decline has clearly stabilised, although prices have generally continued to trend downward. In August, home prices nationwide were 1.9% lower than a year earlier.

“We forecast housing prices to decrease by 1% this year, but to increase by 1.5% next year. In 2027, we expect price increases to accelerate to 2.5%. However, differences in price trends between cities remain significant.”

On the rental market, supply remains abundant, keeping rent increases in check. Limited construction and strong population growth in larger cities have begun to ease the oversupply in the rental market. 

Cuts to housing benefits have particularly impacted young households, the number of which has started to decline, reducing demand for studio apartments.

“However, our home price forecast involves a high degree of uncertainty, which makes other, very different scenarios possible, too,” says Juho Kostiainen.

For those planning to switch homes, the current market offers both opportunities and challenges. 

While long selling times indicate plentiful supply on the market, another factor is the increase in conditional offers in home-switching situations, which has partly extended selling periods. 

Read our tips for changing homes

“In Oulu, Tampere, and Espoo, the number of housing transactions has already returned close to ‘normal levels,’ while in Helsinki, Vantaa, and Turku, activity remains about 10% lower than in 2015,” says Juho Kostiainen.

No region in Finland has reached the high level of sales seen in the aftermath of the Covid pandemic. 

“In large cities, the strong construction activity of recent years has brought substantial supply to the market, which continues to put downward pressure on prices.”

Home prices nationwide have fallen by 12% from the peak in June 2022. The decline has been smallest in Oulu, while Vantaa has seen the largest drop – a whopping 17.5%.

Among the large cities, selling times are the shortest in Oulu and the longest in Espoo and Vantaa.

In August, home prices nationwide were 1.9% lower than a year earlier, but there were exceptions. 

Over the past year, average home prices have increased in Rauma, Kokkola, Vaasa, Kajaani, Hämeenlinna and Rovaniemi. 

“Tourism is driving housing demand and prices upward in Rovaniemi, while in Vaasa and Kokkola, major industrial investments are creating housing needs for workers.”

In many smaller towns, construction activity has been subdued in recent years, which is reflected in rising housing prices amid growing demand. 

Price development has been weakest in Eastern Finland, influenced partly by the withdrawal of Russian buyers from the market, as well as the region’s generally weak economic situation due to declining tourism and the challenges faced by the forestry industry.