Investment demand remains strong in Finnish property market

13.2.2019

Newsec's spring Property Outlook Finland reveals that stock market fluctuations and low interest rates have encouraged investors to seek more stable and higher yields and to decentralise their property investments. The volume of significant property transactions is likely to remain at a considerably higher level than normal again this year, at around EUR 7.5 billion. However, this marks a drop of approximately 20 per cent from the previous year, according to Newsec's projections, as the supply of large-scale real estate investment packages is not likely to meet the strong investment demand.

International investors invested more than EUR 6 billion in the Finnish property market last year. The amount is equivalent to an entire year's property investment volume in a good market situation. International investors' demand has been mainly targeted at office property portfolios as well as large individual office properties. There has been an increase in supply in this sector in the Helsinki city centre, and the demand has driven prices up even further.

Even though the Helsinki metropolitan area accounted for 66 per cent of last year's property transaction volume, the market was buoyant also in other major cities, such as Tampere and Turku, for example. Transaction volume amounted to nearly EUR 600 million in Tampere and over EUR 300 million in Turku. Cities near the metropolitan area and within good rail connections, such as Järvenpää and Hyvinkää, have been noted by investors and are naturally expected to offer higher yields.

Read more in Newsec's spring Property Outlook Finland. Sign up to receive a download link to your email at www.newsec.com/insights/reports/finnish-property-outlook-spring-2019/.