In my own neighborhood, Helsinki 14, the bottom has already been reached. At the very least, asking prices on Oikotie have taken a significant leap upwards. The market has become even more regionally polarized, and now is the right time for homebuyers to close deals in good areas.
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What is the trend in completed home sales, and is there any kind of profile visible in the market where deals are actually closing (price level, area, etc.)?
Since 2022, the trend for existing homes is -25% in Helsinki. Is the golden era of owner-occupied housing over?
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It’s hard to see Stockholm and Helsinki moving in completely opposite directions forever. Helsinki has an eastern neighbor risk that the Swedes have already forgotten.
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Based on my gut feeling, I’d say that in Helsinki’s inner city, the market for homes over a million is alive and well. I have no data to present to back up my claim.
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It’s all about purchasing power. If Sweden is able to drain the top 10% from Finland, I see no obstacle to why the divergence in housing price levels couldn’t continue indefinitely.
Finland is facing more spending cuts and tax hikes, which are not on the horizon in Sweden, which manages its economy better.
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Maybe another 30-40% to the bottom… prices in Helsinki. A couple, three more years of decline.
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We were looking for a suitable home for the family during COVID, and prices were skyrocketing quite a bit. I don’t actually know many people who weren’t at least seriously considering moving back then. I wonder if the end of such a disruption is really the best time for comparison.
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Finland faces further spending cuts and tax hikes that are not on the horizon in Sweden, which manages its economy better.
I also see a chronic challenge in Finland, where public finances are in deficit and it remains uncertain how this long-term problem will be solved. The solution will have a long-lasting impact on various segments of society, from first-time homebuyers to home-switchers and developers. Already, both unsold housing stocks and land reserves are said to be substantial, so a spike in demand won’t send market prices skyrocketing.
Uncertainty about the future must be resolved in the market first; once there is confidence, purchase decisions will follow. Otherwise, we remain in a declining, sales-driven market where buyers are hesitant to commit.
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I’ve also been wondering if the bottom was already reached almost a year ago in my own area (Helsinki 25). There is certainly some variance in the asking prices on Oikotie, but from what I’ve seen in the listings on my home street, the price per square meter in the asking prices has settled at the same level as about a year ago. However, the news coverage emphasizes that the decline in prices will continue even in Helsinki – perhaps “location, location, location” and the studio apartment market apply here as well.
Helsingin Sanomat did report on Nov 18th that the gap between asking prices and actual sale prices has increased significantly from 2023 onwards (Asuntojen hintapyyntöjen ja todellisten hintojen välille repesi kuilu Helsingissä | HS.fi). Though in this matter, too, it seemed that studio apartments were emphasized.
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Sales of existing homes were over 11 percent higher last December than a year earlier, according to the housing market review by the Central Federation of Finnish Real Estate Agencies (KVKL).
The growth in sales volumes was particularly strong in Kuopio and Lahti, where 40 percent more deals were made than during the corresponding period in 2024.
Average prices for existing apartments fell by an average of 5.1 percent in the Helsinki metropolitan area and 8.2 percent in other large cities.
In Turku, prices fell by 6.4 percent, in Oulu by 2.7 percent, and in Tampere by 2.4 percent.
Same old story from the autumn: the housing market picks up when prices drop, YLE reported this morning.
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Housing market recovering, one group holds the key to continued growth | Verkkouutiset
Verkkouutiset has also picked up on the topic in a long article:
There is a record amount of money in bank accounts, but wealth is distributed unevenly between age groups. A broader restart of housing exchange chains would require the wealth of first-time buyers, i.e., young people, to turn upward and for future prospects to strengthen.
Housing prices will remain in the negative in 2025 for the third year in a row. However, the picture is clearly gloomier when the market is viewed in inflation-adjusted terms. Inflation-adjusted peak prices occurred in May 2021. Since then, real housing prices in Helsinki have fallen by about a quarter, and by more than 20 percent across the whole country.
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I don’t own any apartments myself, but I’ve been following the price levels and the profitability equation in my area. Even at these prices, the investment case for rentals seems to rely on appreciation. Return on equity (30%) is still weak or non-existent, plus the cash flow is negative. How do more experienced real estate investors view the situation?
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To speak on a general level: many home sellers are still asking for too high a price in the hope of capital appreciation that simply isn’t going to happen when you consider the economic realities in Finland. It’s just a fact that you won’t get “your money back” if you happened to buy at a peak price during the “zero-interest” era. This is what is stalling the housing market.
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Well, regarding rental yield, surely the caps on Kela (Social Insurance Institution) benefits also play a role? Quite a few of my children’s schoolmates had to move to cheaper apartments over the past year because they exceeded the new limits.
Perhaps lowering those limits is producing exactly the desired effect, but from an investor’s point of view, some kind of phasing could have caused less of a shock, as there has been more competition than average this year and the caps in those are lower.
This is just guesswork; I’m not an investor myself. I sold my own apartment in 2022 and bought a new one at the same time. In hindsight, I could have stayed in a rental for a few years, but fortunately, we are happy with the new place.
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In some places, there is a massive oversupply, while in others, there is a dire shortage of housing. According to Yle’s article, the housing shortage is already so severe that people are being housed in barrack-style buildings. In many places, the housing shortage is already seen as a factor limiting growth and development.
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I haven’t bought anything during the period of zero interest rates. I was referring to the current price level and inquiring about more experienced investors’ views on yield levels, specifically at these prices.
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The growth in transaction volumes was particularly strong in Kuopio and Lahti, where 40 percent more deals were made than during the corresponding period in 2024.
As someone who has followed the Lahti region for a long time, I can’t help but wonder about that alleged 40 percent increase. I actively monitor terraced houses and, to some extent, apartments, and on my search lists, this December was quiet and completely dead from the middle of the month onwards. I don’t remember if the previous December was quite as dismal, but perhaps a 40 percent increase can be achieved if the starting level is close to zero.
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That Yle article doesn’t specify whether the KVKL (Central Federation of Finnish Real Estate Agencies) figures only include (individual) transactions completed through brokers or also bulk deals from larger players. If transactions other than individual sales are included in those statistics, then a bundle of a couple of apartment buildings from a player like Sijoitusasunnot.com, for example, can significantly sway the numbers in a quiet market. I seem to recall representatives of the company in question mentioning on LinkedIn that they have once again set records for the number of apartments purchased.
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Housing investment funds are in deep trouble with these apartments. They aren’t selling.
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4-day-old “news” is coming out as “news” today in Kauppalehti and apparently from the slower forum members. The share price already took a ~10% hit from this last week, and apparently, they wanted a little extra effect. Well, this suits me fine considering my payday later this week and my plans to add to my position.
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