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Investment Property in Finland - Residential & Commercial

This page specifically concerns investing in property in Finland, as opposed to purchasing property as a residence. For additional information on purchasing property in Finland see Buying Property.

Introduction

From the beginning of 2020, buyers from outside the EU and EEA need permission from the Finnish Ministry of Defence to buy real estate in Finland. However, a permit is NOT necessary when buying shares in a housing company, which is how most apartments are owned in Finland. See the Ministry of Defence page, and Apartment Ownership and Shares in Housing Companies.

State Involvement
It should be noted that the state plays a prominent role in the Finnish real estate market. Of the approximately 800,000 rental homes in Finland slightly more than half have been constructed with state subsidies from the Housing Finance and Development Centre for Finland (ARA). The majority of ARA-subsidised dwellings are owned by municipalities and managed through municipal companies, local authorities, and limited-profit housing companies. They are only released from regulation after a period of between 10 and 45 years, so the 'free market' for investors is limited.
More information: www.ara.fi - En, Fi, Sw

Returns on Investment
My (very basic) understanding is that the best return on Finnish residential property investments is to be found from small apartments in central Helsinki. Additionally areas undergoing gentrification such as Kallio, a couple of kilometres north of the city centre, offer attractive investment prospects. Percentage-wise, in the current economic climate larger properties don't tend to make such significant gains and the market is not as active. However, don't take my word for it - always obtain professional advice.

Professional Advice
The companies referred and linked to on this page are established Finnish firms with local expertise, actively offering investment property information and services in English. This page does not include companies claiming online to be Finnish property investment experts or specialists, who upon investigation were found to be based overseas with little or no expertise regarding Finland.

I expect all the agents listed at Finnish Real Estate Agents would also be able to provide sound investment advice, they just haven't promoted that service in English at their sites... yet.

Helsinki vs. The Rest of Finland

Greater Helsinki, also known as the Helsinki Metropolitan Area, comprises the cities of Helsinki, Espoo, Vantaa and Kauniainen. It has a dominant position in Finland, accommodating quarter of the Finnish population and some 30% of all jobs. It delivers more than one-third of Finnish GDP and the proportion of private sector employment is significantly higher than in the rest of Finland. The global economy has a stronger impact on Helsinki than other regions. From the property investment perspective, central Helsinki is certainly the location of desire for most investors with the wherewithal, but it's also a lot more expensive than the rest of Finland as you will see below.

Investing Outside Helsinki
If you are interested in purchasing outside Helsinki, local real estate agents will have property data for their region stretching back over some years, and they should be able to provide good advice regarding the best investment prospects in terms of size, type and location of property. Language is rarely a barrier in Finland. In my limited experience with Finnish real estate agents (1 purchase, 2 sales) I have found them efficient, straightforward and ethical. This is in stark contrast to my experiences in Manhattan, which were high-pressure cutthroat affairs - and a lot more expensive.

Residential Property, Helsinki

In 2018 house prices in Helsinki continued to rise, amidst low interest rates and improving economic conditions. By contrast, in the rest of the country the average price of old dwellings fell slightly. Residential construction activity was mixed; the number of dwelling permits issued for residential buildings fell from 2017, but dwelling starts rose and completions were up over the same period.

Some salient facts relating to the property market from the article include:

For detailed info see KTI's
Finnish Property Market 2019 PDF Archive

Residential Property Market Reports

KTI Property Information is an independent information business providing regularly updated, comprehensive information and analysis of the Finnish real estate market.
www.kti.fi/en/
KTI Publications

KVKL, The Central Federation of Finnish Real Estate Agencies, publishes brief industry reports, including Finnish Housing Markets Reviews. Finnish.
Reports include:

Property Prices: Dwellings in Finland, 2019

According to preliminary data for September 2019 from the public authority for statistics, Statistics Finland, prices over the past 12 months of old housing company dwellings in blocks of flats and terraced houses had:

Index: 2010=100. Source: Prices of dwellings in housing companies, Statistics Finland
 

Investment Property: Advice, Procurement & Management

Newsec
Full service property house, providing private and corporate property investors with analyses, evaluations, transaction and funding advice, and asset management. Offices in Helsinki, Hämeenlinna, Imatra, Jyväskylä, Kokkola, Kuopio, Oulu, Tampere, Turku, Vaasa.
Helsinki Office: Mannerheiminaukio 1 A, PL 52, 00101 Helsinki Finland Map
Tel: local 0207 420 400 international +358 207 420 400
Services include:

Advice for Landlords: Finnish Landlords Association

If you intend to buy an investment apartment, the Finnish Landlords Association website has a wealth of information about investment strategies and returns, applicable law and documentation, taxation, and more. There is also a large Guides and Recommendations section.
www.vuokranantajat.fi

Tax on Real Property and Rental Income

Tax on Real Property

Rental Income

This information was obtained from the Finnish Tax Administration in December 2019. Always check www.tax.fi for latest updates.

Commercial Property: Market Reports, Brokerage, Management, and Advice

Newsec
Founded in 1994, Newsec provides commercial property sales and acquisition advice, valuations and analyses, brokerage services, and asset and property management services. Newsec publishes Property Outlook Finland in English, with information about Finnish markets useful to investors as well as companies making decisions regarding location. Contents include:

Newsec: www.newsec.fi  Fi
Helsinki Office: Mannerheiminaukio 1 A, PL 52, 00101 Helsinki Finland Map
Tel: +358 207 420 400
Property Outlook Finland: Current and archived versions of the reports are available.
Property Rental: See the Business Space page for commercial property rental.

KTI Property Information
KTI is an independent information business providing information and analysis of the Finnish real estate market. Their Benchmarking, Information and Research services support the planning, steering and monitoring of key processes of the property business. KTI's publications in English, KTI Market Review and The Finnish Property Market, are tailored towards international investors and offer detailed information regarding investment in Finnish real estate. They are available for purchase or online as PDFs. Contents include:

KTI: www.kti.fi/en/
KTI Publications

Catella Property
Swedish-originated Catella Property is a leading European transactions advisor with expertise in the Finnish commercial property market, providing valuation, advisory, brokerage, and sales & letting services. Operating Finland-wide.

Catella Property: www.catella.com/en

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