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Seasonal fluctuations are a hallmark of the rental housing market. According to KTI, significantly fewer new rental agreements were signed in Q4 compared to the summer months, highlighting the seasonal dynamics of the rental market. The Finnish Landlord Association’s Landlords 2025 survey also reflects a soft rental market, as only one-third of private landlords reported having raised rents over the past year.
The occupancy rates of rental apartments declined slightly towards the end of the year in many major cities. In the Helsinki Metropolitan Area (HMA), the occupancy rate averaged just below 91% in Q4 2024, while in other major cities, the figure was 94.7% on average, according to KTI. Due to abundant rental supply, rent levels in the HMA saw little increase over the past year, except for state-subsidized ARA apartments. Rents for non-subsidized apartments in the HMA rose by only 0.5% year-on-year in 2024, while elsewhere in the country, rents increased by an average of 1.9%, according to Statistics Finland.
“The absorption of supply is progressing at different rates in major cities, which is also reflected in key rental market indicators. According to Vuokraovi.com, the number of rental listings in the HMA remains more than double compared to 2019. However, time is an investor’s best friend. For example, in Jyväskylä and Oulu, the number of rental listings had returned to 2019 levels by the end of 2024, while occupancy rates in these cities were over 95% in Q4, according to KTI,” comments Retta Management’s real estate analyst Anton Takkavuori.
The challenging real estate market has had a noticeable impact on open-ended real estate funds, particularly due to increased redemption orders. Redemptions from these funds amounted to approximately EUR 285 million in 2024.
According to Inderes, the actual selling pressure on real estate funds is even more significant, as many open-ended real estate funds have extended their redemption periods or postponed redemption payments due to weak market liquidity. As a result, December’s redemption statistics do not provide an accurate picture of the state of these funds. Fund capital development should be monitored over a longer time horizon rather than focusing on individual months.
The closure of funds could also have broader implications for the real estate market. For instance, it is possible that the recovery of housing construction could be delayed, as a significant portion of non-subsidized rental housing was built during the construction boom, thanks to strong demand from real estate funds.
The rental market forecasts made by PTT (The Pellervo Economic Research Institute) in early 2024 for the year’s development proved to be largely accurate in many major cities, where rent growth remained stable and occupancy rates stayed high compared to the HMA. The forecasts were most accurate for Turku, Tampere, and Oulu—cities where the market conditions have been more favorable than in the HMA.
However, forecast accuracy has been weaker, particularly at market turning points. Among major cities, the largest discrepancies between PTT’s rent growth projections and actual figures were in the HMA, where uncertain market conditions have made rent growth predictions overly optimistic in recent years.
Looking at year-on-year changes in non-subsidized rents, the underlying market story has remained largely unchanged for the past few years. Among major cities, Tampere, Oulu, and Turku continue to lead in rental growth. Meanwhile, high supply levels in the HMA keep rent increases moderate. Statistics also show that in the surrounding municipalities of the HMA, rental growth has been on a downward trend since 2023, reflecting a challenging market.
According to KTI, occupancy rates in Q4 showed a slight increase in Espoo and Vantaa, while in Helsinki, the occupancy rate declined by approximately 0.5 percentage points compared to Q3. The highest occupancy rate, slightly over 96%, was recorded in Tampere in Q4, which is also reflected in the city’s strong rental growth. In Turku, the rental occupancy rate declined by 0.9 percentage points from the previous quarter but remained above 93%.
Liquidity in the transaction market remained thin toward the end of the year. KTI’s data indicates that real estate transaction volumes are now at levels comparable to the early 2010s, despite the total size of Finland’s professional real estate investment market having nearly doubled over the past decade. On a positive note, net investments by foreign real estate investors have remained clearly positive.
Population growth in Finland in 2024 was primarily driven by net migration. In 2024, the number of immigrants reached the second-highest level in recorded history, with net migration also reaching the second-highest level at 48,546 people. Pre-pandemic population forecasts had estimated annual net migration at only 15,000 people.
According to PTT, in Finland’s six largest cities, over 80% of residents with an immigrant background live in rental housing, with the majority residing in non-subsidized rental apartments.
“The continued migration to major cities is a key factor behind rental market growth. Statistics show a clear seasonal pattern: net migration peaks during the summer months (June–August), while in winter (December–February), it is significantly lower. This is reflected in the rental market, as the demand impact of migration is much weaker in the winter season. A similar seasonal pattern is also consistently observed in intermunicipal net migration in large cities,” summarizes Takkavuori.
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Anton TakkavuoriKiinteistöanalyytikkoRetta Managementanton.takkavuori@rettamanagement.fiPuh. 0400 853 528
*Figures are based on data and reports from KTI, Investment Research Finland, Statistics Finland, Inderes, and PTT.
