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The Finnish housing market has seen a significant increase in buyer interest, marking a noticeable turnaround at the start of 2024, the Finnish Real Estate Federation (SKVL) reports. According to SKVL CEO Mannerberg, at the end of the year the purchasing intent indicator recorded the biggest shift in its history. Along with this, there is an obvious increase in the willingness to sell, which is a signal of renewal on the market.
In metropolitan areas, especially in Helsinki, Espoo, Vantaa and Tampere, there is a surge in demand, especially for small apartments and well-maintained private houses. This demand has established a new normal and is expected to bring balance to the market.
Despite the challenging year of 2023, when new construction slowed down, the sales of apartments on the secondary market remained moderate. The last quarter saw an increase in sales of small homes as first-time homebuyers were attracted by favorable price levels. In particular, the Helsinki metropolitan area has experienced a significant increase in sales volumes.
A notable factor contributing to the market recovery is the reduction in Euribor rates, which SKVL believes will further stimulate the market activity.
Mannerberg is awaiting a response from the European Central Bank (ECB), given Finland's rapidly declining inflation rate. However, he warns of the possibility of a temporary rise in inflation in Europe due to global crises such as problems in international shipping near the Middle East.
The lineup of homebuyers is changing, with the share of first-time homebuyers expected to fall to around 10% of transaction volumes, while investor buyers are clearly making a comeback, representing around 10% of clients. The majority of buyers are households and individual homeowners.
The rental housing market is also seeing a slight growth, with increased demand for larger rental apartments. However, rent levels in the free market are expected to remain stable.
SKVL's forecast for the whole year is moderate but optimistic. The experts are projecting a a5–10% growth in sales of detached houses, semi-detached houses and townhouses. The price growth for these properties is likely to be modest, around 1-3%, especially for new single-family houses, which are in high demand. The sales of older apartments in multi-apartment buildings are also expected to rise moderately, with slight price increases, especially in central Helsinki and Espoo.
Although the sales of new apartments in apartment buildings are not expected to increase significantly, the transactions are still being concluded. 2024 is seen as a period of looking for a fresh start, with new construction projects likely to begin closer to 2025.
The Finnish housing market is showing signs of vitality and growth, driven by rising buyer interest, the change in types of buyers and a recovering economy. Although the market has not yet reached pre-pandemic levels, the positive trends point to a steady path to normalization and growth in 2024.
Source: Helsinki Times
