Blocks of flats at sunset in Espoo on 2 February 2023. Investments in Finnish real estate fell by almost 60 per cent year-on-year in the final quarter of 2022, according to real estate consultancy CBRE. (Heikki Saukkomaa – Lehtikuva)

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ACTIVITY in the Finnish real estate market slowed noticeably at the end of last year as a result of uncertainty arising from global inflationary pressure and rising interest rates, indicates a market report published in January by CBRE.

The real estate consultancy estimated that investments in the domestic real estate market decreased 58 per cent year-on-year to 973 million euros between October and December.

Over a quarter, or 270 million euros, of the total was invested in office real estate, almost 200 million euros in the health care real estate, and over 110 million euros in residential real estate, the report indicates.

Activity in the first half of the year was the highest on record, with real estate investments adding up to 4.53 billion euros. The total investment volume for last year stood at 7.2 billion euros, an increase of one per cent from the previous year and the highest total since 2018.

CBRE stated that it expects the decline in the number of investments to continue in the first half of this year. Finland, it said, should witness a drop in investments of around 5–10 per cent, similarly to many other countries in Europe.

“There are several deals in the pipeline for the Finnish market, and the market activity is expected to pick up in 2023 from the [second half] of 2022 despite the weakened economic outlook and high uncertainty,” the report reads. “Despite the uncertainty from spiking inflation and short-term slowdown in the economy, Finnish property market will continue to see activity in different sectors in 2023.”

The market is likely to begin its recovery in the second half of the year as macroeconomic challenges ease.

Aleksi Teivainen – HT

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