Houses in Finland have fallen in price by 13% in some regions
Houses prices in Finland have been falling since the second quarter of 2002. The biggest fall has been in the secondary housing sector. In some areas, prices have fallen by almost 13%.
The Finnish market has been stagnant for some time, but values have started to fall this year. In the second quarter, the situation in the sector was as follows:
– the value of older homes fell by 6.8% year-on-year;
– the number of transactions fell by 8%;
– homes in large cities fell in value by 3% and in other communities by 8%;
– houses in municipalities with a population of up to 20,000 people fell in price by 12.7%, the highest in the country;
– the number of transactions fell by 16% in municipalities with up to ten thousand inhabitants.
The value of building land increased by 2.3%. At the same time, the number of sales fell by 3%, and the price of new single-family houses fell by almost 3%.
Conditions for falling prices
It is worth noting that housing costs in Finland have been declining since the beginning of the second half of 2022. Some experts attribute this trend to the departure of buyers from countries under sanctions. However, their market share was previously insignificant, so this factor is unlikely.
According to the Helsinki Times, investment in the housing sector has fallen by almost 36% since 2022. This is the lowest level in the last 15 years. Analysts note that the construction crisis was one of the critical factors in the deterioration of the local economy. However, the situation started to recover gradually after 2022. The number of applications for construction projects increased, as did the number of vacancies in the construction sector. Nevertheless, the number of housing completions remains low for the time being. This trend is likely to continue in 2025.
The property market saw low activity in the first half of 2024, but then analysts noted an increase. The positive trend will continue next year. Jon Vidgren from OP Financial says that sales volumes have exceeded the minimum levels. However, it is too early to talk about an active market recovery as the number of transactions remains low.
The analyst believes that lower interest rates could change the situation. The revision will contribute to an easing of credit conditions in the housing sector and an improvement in the economic situation in general. In addition, higher wages will stimulate home purchases.
Property prices
The average price per square metre of an apartment in Finland ranges from EUR 3.4 to 5.3 thousand. Rental yields range from 3.2% to 4%. In Helsinki, the cost of a square metre in the city centre is around EUR 7.5 thousand. In residential areas, the price is around EUR 4.6 thousand per square metre. The lowest prices for apartments are recorded in Turku, where the cost varies from EUR 3.8 to 2.1 thousand per square metre.