Finland’s Real Estate Market recovers
Finland’s real estate market has shown clear signs of recovery in 2025. Transaction volumes are on the rise, investment liquidity has strengthened, and interest from foreign investors is growing. This trend reflects renewed market confidence, suggesting that market activity is set to exceed last year’s levels. This provides a strong foundation for a positive momentum in the real estate sector, which we expect future market data to confirm.
The recovery in transaction volumes that began last year across Europe and the Nordics is now becoming clearly visible in Finland’s real estate market. The residential sector is expected to emerge as one of the key drivers in 2025. Although construction costs remain high following the sharp increases after Russia’s invasion, new development is cautiously underway. Growth areas with net population inflow provide a sustainable base for demand and accelerate construction activity, further strengthening the balance of supply and demand in the residential sector.
Activity in the commercial property market is rising, but capital is increasingly directed toward carefully selected, high-quality assets. The stability offered by long-term leases makes these properties particularly attractive to investors.
Interest from international investors in Finland has strengthened significantly. The country is increasingly viewed as an attractive destination for both real estate and infrastructure investments. Improved conditions in the financial markets and easing lending terms are boosting investment activity. Both existing investors in Finland and new entrants are pursuing assets using updated or entirely new strategies.
The growing interest from core investors also reflects strong confidence in Finland’s stable operating environment. A diverse real estate market offers opportunities across different strategies, making Finland an appealing destination for a broad range of investors.
Finland’s real estate market fundamentals remain strong over the long term, and yields are still competitive, particularly compared to other Nordic countries. The yield gap for prime offices relative to Sweden is historically large, and typically, yields across markets converge over time as financing conditions become similar.
We believe that the gradual strengthening of lease fundamentals for prime assets in Finland will narrow the yield gap, creating attractive opportunities, particularly for investors employing yield shift strategies, as Finnish prime office yields approach the level of other Nordic markets. In contrast, the retail property segment currently shows no comparable yield differentials, indicating more balanced pricing.
The second half of 2025 will bring attractive opportunities across various real estate investment strategies. Market polarization underscores the need for a strategic approach: investing in growth centers and well-managed assets offers both stability and returns, while risks remain higher in peripheral areas. Investors who act selectively in prime locations and high-quality assets are likely to benefit most from this market recovery.
You May Also Enjoy
Clarity on energy efficiency rules for commercial property needed
English Housing Survey 2024 to 2025
Propertymark responds to latest HMRC property transactions report
Mortgage activity dips in December
£19.9bn of PRS refurbishment required
