Finland’s Housing Market Stabilizes

Finland’s housing market faced challenges at the beginning of 2024, but transaction volumes steadily increased throughout the year, leading experts to speak of market stabilization. However, prices for both new and existing properties continue to decline, and interest rates are falling—factors that may be driving the rise in sales.

The number of housing transactions increased in every quarter of 2024, according to Helsinki Times, citing data from the Finnish Real Estate Federation (KVKL). The first quarter recorded a historic low, with only 10,000 secondary housing units and fewer than 500 new units sold. It was the weakest first quarter since 1999, and January was the slowest month on record.

However, by the last quarter of the year, transaction volumes had risen by 35% compared to the beginning of the year. Sales of new properties also peaked during this period, signaling an improving market. In total, 50,392 secondary market properties and 2,012 new apartments were sold in 2024, marking a 1% increase from 2023. The total value of real estate transactions reached €10.2 billion (+€300 million). However, this remains well below the 2021 peak of €18.2 billion.

Housing Prices Continue to Decline

Housing prices declined slightly, continuing the downward trend that began in late 2022. According to KVKL, prices for secondary high-rise properties fell by 1.7% in the Helsinki metropolitan area and 0.8% in other major cities compared to the beginning of the year. Prices in Tampere and Turku increased slightly—by 0.7% and 2.4%, respectively—while Vantaa and Oulu saw sharper declines of 6.7% and 7.6%. Prices for detached houses and townhouses declined at a slower rate, reflecting a more balanced supply-and-demand dynamic compared to apartments. Additionally, properties remained on the market longer as many listings were still overpriced relative to current conditions.

The vacation home market saw a 15% increase in transactions, with total sales reaching nearly €460 million—more than 16% higher than the previous year. Demand for vacation homes was particularly strong at the end of 2024, with prices remaining elevated compared to pre-pandemic levels. The ability to work remotely and increased interest in high-quality holiday properties have sustained demand, especially in regions like Lapland.

Diverging Market Trends by Region

Finland’s national statistics office (Stat.fi) presents different figures. Preliminary data show that prices for older residential properties in housing companies fell by 3.3% nationwide in 2024 compared to 2023. In major cities, the steepest declines were recorded in Vantaa (-5.7%) and Helsinki (-4.5%), while the smallest drops occurred in Oulu (-1.4%) and Espoo (-2.4%). Outside major cities, prices decreased by 2.2%.

In Finland’s six largest cities, prices fell by 3.9%, with apartment prices declining by 3.7% and townhouse prices by 2.3% compared to 2023. Smaller apartments saw the sharpest drop: one-bedroom units fell by 4.3%, while three-bedroom and larger apartments declined by 3.3%. The most significant price reductions were in Greater Helsinki, where one-bedroom and three-bedroom apartments declined by 4.8% and 4%, respectively.

In large cities, one-bedroom apartments in Espoo saw the biggest price drop (-7.8%). Vantaa led in price reductions for two-bedroom (-9%) and three-bedroom (-5.2%) apartments. Outside major cities, one-bedroom apartments decreased by 3.4%, two-bedroom by 3.2%, and three-bedroom by 1.7%.

The townhouse segment saw a 2.3% year-on-year decline. In Greater Helsinki, townhouses depreciated by 3.2%, while in the six largest cities, they fell by 3%. The sharpest townhouse price declines were recorded in Helsinki (-5.9%) and Turku (-5.4%). Outside major cities, townhouse prices fell by 1.7%.

Prices on the secondary market dropped in nearly all regional centers except Rovaniemi, where prices increased by 2.2%. The steepest declines were seen in Kajaani (-5.7%), Lappeenranta (-5.3%), and Mikkeli (-4.3%). The smallest declines occurred in Lahti (-0.1%), Vaasa (-0.2%), and Kotka (-0.7%).

New Housing Market Performance

Prices for new properties in housing companies declined by 2.3% nationwide and by 5.0% in Greater Helsinki. In other parts of the country, prices decreased by just 0.2%. Prices for new townhouses rose by 0.6%, while new apartment buildings saw a 3.1% decline. Overall, 13% fewer new apartments were sold by housing companies compared to the previous year.

Economic and Policy Influences

The Finnish Real Estate Federation noted that inflation in the country slowed significantly in 2024, nearly reaching zero. However, economic uncertainty continued to weigh on consumer confidence. By mid-2024, interest rates began to decline, providing some relief for mortgage borrowers.

Tuomas Viljamaa, CEO of KVKL, emphasized the role of political decisions in shaping the market. He pointed out that the removal of mortgage interest tax deductions and tighter lending conditions had eroded buyer confidence. "Restoring trust in the housing market requires supportive policies, such as extending mortgage repayment periods to 35 years and reducing property transfer taxes," he said.

Outlook for 2025

The Finnish Real Estate Federation predicts further market recovery in 2025, with transaction volumes expected to rise by 6–9% and housing prices increasing by 4–6%. KVKL representatives attribute this optimism to improving economic stability, falling interest rates, and ongoing urbanization trends that will drive housing demand in regional centers and major cities. Additionally, increased activity in new construction and renovation projects is expected to support the housing market’s recovery in the second half of 2025.

Meanwhile, Stat.fi reports that in December, developer revenue grew marginally by 0.2%, while sales volumes increased by 3.7%.