SKVL housing market forecast: Willingness to sell and buy apartments is on the rise – Rapid rise in unemployment and layoffs delay decision-making – Clear pick-up in the rental market

The exceptional situation will gradually unravel this spring if there are no new unexpected factors

Lower interest rates and improved employment are decisive factors for a clear pick-up in housing sales. Newer detached houses and terraced houses are most in demand. The demand for apartments in apartment buildings in need of renovation is lower. "The market situation in Finland is exceptional even on the European level," comments Mannerberg. "We have a lot of houses that are about 40–50 years old and that need to be repaired extensively. In housing sales, demand is very limited due to the selective behaviour of the financial markets. Many families would like to buy homes to be renovated, but a mortgage is not available for renovation costs. Banks are still reluctant to grant loans for houses or apartments in need of renovation in general, unless they are located in the centres of growth centres," he continues.

"Energy efficiency will continue to be a loan component in the coming years, as the EU's Energy Efficiency Directive enters Finnish legislation and requires higher energy efficiency. Receiving EU subsidies for renovations will play a crucial role for Finland's housing stock in the coming years," Mannerberg points out.

Interest tax deduction must be refunded temporarily

In SKVL's view, the deduction for mortgage interest should be immediately reinstated temporarily. At the moment, huge sums of taxes remain unpaid on housing sales and construction, and the stimulus effect of the interest deduction on trade and employment would also be positive for the state in terms of net benefits.

Share of first-time homebuyers fell to normal level in the early part of the year – investors on the move

The rush to housing sales seen at the end of last year was reflected in a strong cooling of sales in the early part of the year. However, first-time homebuyers have still bought about 8–12% of homes. This indicates that if there is no pressure on the buyer to sell their own home, a lower price level is still tempting to buy their first home. Investors have also already been on the move to a greater extent, and investment apartments have been traded especially in Central and Northern Finland, as well as in Ostrobothnia and Helsinki.

Demand for cottages at pre-corona level

Interest in holiday homes suitable for year-round use is clearly highest in cottage sales. Cottages in good condition and well-equipped on the shores of large bodies of water are still the most popular types of cottages. However, cottage sales are seeing the impact of the general economic situation and have clearly returned to the pre-corona market situation, where cottages in good condition and in the right location are selling as before and sales start to take place when the summer season starts.

Rental housing market

The survey investigated how changes in housing allowance and the general market situation affect the rental housing market. There is now a clear trend that tenants are switching to more affordable rental apartments, either in a more affordable area or smaller apartments. According to the forecast, there will be no significant increase in rents, with the exception of Northern Finland and parts of Ostrobothnia and North Karelia. The demand for rental housing in the smallest apartments is still not as high as the supply, so rents will not increase especially in them. This contributes to slowing down investors' enthusiasm for small apartments. However, higher charges and higher interest rates in most housing companies are constantly putting pressure on rent increases.

No rapid change is expected in new home sales

Prices of unsold new homes are expected to decline somewhat due to low interest. The demand for small apartments has recovered slightly, but there is still an oversupply in areas close to growth centres, where small apartments were built heavily in recent years. During 2025, however, a turnaround in new production and a recovery in demand are expected, as well as a clear decrease in supply.