Prices for older single-family homes in Finland fell 9.5 percent during the July-September period compared to the same timeframe last year. Statistics Finland reports this marks a significant acceleration from the 6.1 percent decline recorded in the previous quarter.
The downturn hits urban centers hardest. Municipalities with over 100,000 residents saw prices slide 10.9 percent. Eastern Finland experienced the most dramatic correction with prices down a quarter from pre-pandemic levels. Western Finland followed with prices dropping over 15 percent.
Hypo Bank chief economist Juho Keskinen noted in a statement that homeowners benefit from lower interest rates and reduced living costs. But he explained these positive factors cannot overcome fundamental demographic challenges.
A strengthening economy and improved purchasing power fail to reverse price trends in regions experiencing population outflow. The number of family buyers seeking single-family homes continues to decline in these areas both now and in the future.
Empty lot prices fell alongside homes, dropping 10.7 percent on average. This brings land values back to pre-pandemic levels. Meanwhile, new construction home prices remained unchanged from last year, showing a slight 0.3 percent increase from the previous quarter.
The market shows some positive movement despite price declines. Transaction volume for older homes increased 2.6 percent compared to last year. Municipalities with 20,000-59,999 residents led this growth with a 9.3 percent rise in sales.
Keskinen observed that single-family home sales have improved steadily for nearly two years, mirroring trends in older apartment buildings. The market still trails pre-pandemic transaction pace by about 15 percent but now sits just 8 percent below the 2015-2019 average.
Not all areas shared this improvement. Municipalities with 60,000-100,000 residents experienced a 7.0 percent decrease in transactions compared to last year.
This housing market correction reflects Finland's ongoing regional disparities and demographic shifts. While lower interest rates provide relief to existing homeowners, they cannot compensate for declining demand in areas losing population. The market appears to be finding a new equilibrium after the pandemic-era volatility, but regional differences remain stark.
International readers should note that Finland's housing market operates differently from many other countries. The prevalence of single-family homes and distinct regional characteristics create unique market dynamics. The current correction presents both challenges for sellers and opportunities for buyers entering the market.