I did some analysis on my jointly owned forest’s (yhteismetsä) figures from last year. Total harvest was approximately 6,000–7,000 m3, all standing sales.
Record prices were obtained for timber last year, which is hardly news anymore.
Logs averaged 83 EUR per m3 (Almost all spruce or pine at nearly 50/50, only a little birch)
Pulpwood averaged 34 EUR per m3 (Spruce/pine/birch roughly in equal amounts)
In 2025, final fellings accounted for only about 1/3 of the harvest area, meaning it was mostly thinnings. And yet, the average prices for every species were higher than in 2024, when it was mainly final fellings. This further emphasizes how intensely the raw wood market was operating until Midsummer 2025.
The last couple of winters have been mild or short, meaning winter harvesting conditions were poor. Consequently, several thousand cubic meters of winter stands sold at high prices from at least 2025, maybe even earlier, remain uncut. This should guarantee OK prices for pulpwood in 2026 as well, provided the weather is favorable. New pulpwood deals will, of course, go at lower prices, in the range of 22–25 EUR per m3, I believe.
Forestry is an interesting form of investment, especially direct forest ownership. I own a couple of small plots myself, and an elderly relative is interested in selling his holdings to the younger generation. I’m interested in buying, and because of this, I tried to piece together some thoughts on the art of forest investment. I left the recreational values of the forest out of the analysis, focusing purely on financial return.
Pros:
Forests always grow. The quality of the plot determines how much, but at least a couple of percent per year. Harvest-ready stands are, of course, a separate matter.
Timber is a real asset that retains its value. It’s not as liquid as a stock, but a forest estate in the middle of nowhere will surely sell if necessary, unlike a detached house in the same zip code.
Leverage can be utilized, similar to real estate investing. However, the collateral value is lower, the loan term is shorter, and the margin is higher.
In direct forest investment, you can influence the return yourself by doing part of the forestry work, e.g., planting and clearing. The most dedicated even do delivery sales (hankintakauppa) on small stands.
If you get the estate for a bargain, you can increase the return even further. This is easier said than done. For example, sometimes properties listed in public brokerage services have errors in the timber volume estimates; you can verify this by visiting and measuring the site yourself. It’s time-consuming, much like analyzing stocks or apartments.
Over the next 10 years, a large number of forest owners will become deceased estates, and properties will definitely come onto the market. We could be facing a buyer’s market.
So far, Finland has had a fairly neutral and even positive public policy toward forest estates; for example, the forest deduction was recently increased. Forest giants want timber and are in the same boat as you in some lobbying matters.
Perhaps new innovations in bio-products will increase the demand for wood in the future.
Cons:
Long rotation period. If you make an investment, such as planting or seedling stand thinning, it takes 10–30 years before the first euros come in from the first thinning. Final felling takes 60–100 years.
Capital intensity. Since the collateral value of a forest is 50–60% and estate prices are measured in tens of thousands, a large down payment is required.
Edit: Adding natural risks here, such as diseases and forest fires. On the other hand, climate change may increase forest growth.
Forest estates have been expensive for a long time due to forest funds. Profit is made at the time of purchase here too, and it’s difficult to make a forest estate bought at a high price profitable.
Politics! For example, if METKA subsidies (forestry incentives) were cut, it wouldn’t be worth managing young stands. What about a property tax for forests? When the rate of return is low and the rotation period is long, even small setbacks can be poison for a forest owner playing with borrowed money.
Conservation. This also falls under politics, but regulations coming from the EU via Southern European officials sometimes feel almost apocalyptic compared to domestic conservation debates. As a forest investor, you are essentially at the mercy of larger forces, hoping that in 10–20 years your plots won’t meet the criteria for full protection or harvesting restrictions.
The wave of forest estate sales mentioned as a “pro” may also involve risks. If forest wealth shifts and concentrates into large funds and corporations, the private forest owner might become a pawn in terms of interest representation.
Returns on forest investment come directly from timber demand. Short-fiber pulps from South America and China could reduce the demand for Finnish wood. What if new technologies reduce it even further?
The more you do yourself, the more it resembles part-time entrepreneurship. With a large enough forest holding, there’s the possibility of turning it into full-time entrepreneurship. Thus, you must see some other meaning in the activity besides just euros and enjoy trekking in the backwoods.
I’ve been weighing the benefits and risks of direct forest investment in my head, and in my opinion, the regulatory pressure coming from the EU, among other things, should be reflected in forest estate prices by lowering them. Usually, political risk lowers stock prices, but Finnish forest estates are currently being sold in public brokerages for even more than the value of the standing timber. With good soil and value growth, interesting return figures can be achieved even with borrowed money, but if harvesting is only possible in about 10 years, that’s a long time to wait at the mercy of politicians. There should be a margin of safety in the purchase price.
At current prices, I can’t make the equation financially viable for myself. If one manages to get a forest estate at a discount and is ready to get their hands dirty, then it can be financially sensible. Perhaps a potential future wave of sales will make the market more interesting.
Any thoughts? I would welcome views from more experienced investors—did I miss something essential?
You probably knew this already, but I’ll post it for others.
If you buy (rather than inherit) a forest estate, the forest deduction (metsävähennys) will reduce the taxable portion of timber sales by 75% starting from this year; it was 60% before 2026.
Of course, the same problem remains—you can never be sure about politicians’ whims as new expenses are constantly invented and the money is always gone.
Secondly, the war in Ukraine will end in the coming years, and imports from Russia will start as soon as the borders open. Regardless of what else might be said.
In other words, timber prices will be under pressure.
On the other hand, the reconstruction of Ukraine will also begin as soon as the war ends. This will trigger a so-called “Korean boom” in the construction industry for years → Upward pressure on wood prices for a long time.
This is unfortunately behind a paywall, but in it, Stora Enso’s former Russian wood buyer stated that the infrastructure and the entire procurement chain in the East are in such bad shape that imports cannot be ramped up very quickly:
I cannot take a personal stand on the matter, but this and the highlighted reconstruction of Ukraine serve as reminders of the risks regarding wood prices. Construction is cyclical, and geopolitics has heavily stirred up prices here. If logging is timed at a bad moment and cash management cannot withstand the wait, then one must harvest at a poor price. In my opinion, that is also a downside.
This is one risk for a small-scale forest owner. You would need hundreds of hectares of forest to be able to sell steadily and thus diversify the sales and price risk over time. This is one reason why, years ago, I joined my forests into a jointly owned forest (yhteismetsä). I considered the yield from my 50–100 hectare estate to be too inconsistent, and on the other hand, the estate was too large for a hobbyist to manage alone.
I personally own about 175 hectares of forest and manage it myself. My goal is to acquire at least double that amount, as 175 hectares is too “small” an amount for steady returns. I commission harvests according to the needs of the stands. I haven’t really started following wood price trends, as I view this as a long-term investment where some wood sales will hit a good price and others a poorer one.
I am personally involved in forest ownership through a joint ownership group, and my spouse solely owns roughly the same amount of forest. Both are essentially inherited forests, so I have never really thought of them as investments, as selling those plots is not an option.
They are just a “bank” from which you can withdraw a larger sum of money at once, but rarely. Because the combined surface area is too small (a total of about 60 hectares of varying terrain including rocky outcrops, swamps, and power lines), one cannot make those “withdrawals” very many times during their period of ownership.
The plots should contain stands of different ages and large enough compartments, and the total surface area should be sufficient for them to be considered investments that yield regular income (i.e., every few years). Now, they are mainly assets that renew very slowly (one generation regenerates a stand, the following generations grow it back), from which you can get larger one-off additional income by selling timber.
It is not worth selling thinning harvests separately; there must always be a sufficient clear-cutting area (e.g., 2–5 ha), and then the thinning is bundled into that deal, with the income from it being marginal compared to the clear-cutting. Personally, I’m not interested in the price level of pulpwood, because the real money comes from logs anyway. One would need to own hundreds of hectares of forest to be able to sell sufficiently large standalone thinning blocks at once. A thinning area of a few hectares can be difficult to sell at a reasonable price. Therefore, I do not recommend investing in forests if you cannot afford large enough surface areas. “Hobby plots” are a completely different matter.
If I eventually happen to find a plot of a few hectares, I have a dream of selling firewood on a semi-hobby basis during retirement. I’ve been looking into it, and you could get a rear-wheel-drive tractor for about €3k–4k and a guillotine-style log splitter to go behind it for about €2k. If I produced a few dozen cubic meters of firewood over the winter, I could get at least some kind of return even from a relatively small area. I doubt the hourly wage would be anything spectacular, though. However, the price per cubic meter for pole wood (rankapuu) is quite nice! And you get the exercise as a bonus. Last winter, I made nearly ten stacked cubic meters (pinokuutio) of firewood from other people’s forests, and in hindsight, it wasn’t even that much effort—even though I split the wood with an axe and hauled it with a snowmobile.