Property investors in Finland are slowly returning to the housing market. New data shows a steady rise in buy-to-let loans during the first half of 2025.
The Bank of Finland reports that investment property loans reached €696 million from January to June. This is an 18 percent increase compared to the same period in 2024. In June alone, new investment loans hit €120 million, up from €96 million in June 2024.
While these numbers are still small compared to total mortgage activity, they show a clear change from the sharp drop after the market peak in the early 2020s.
“There has been a steady increase for a while,” says Eemeli Karlsson, chief economist at the Finnish Landlord Association. “But it is too soon to say the market has fully recovered. Investors are cautious.”
Karlsson points to the association’s spring survey, where about one in four investors said they plan to buy property in the next year. For large landlords, the number rises to nearly 50 percent.
Investment loans still make up a small share of the total. At the end of June, Finland’s total housing loan stock was €105.7 billion. Investment loans accounted for €8.9 billion or just over eight percent.
Regional differences play a big role in this recovery. Interest is strongest outside the Helsinki region. Mid-sized cities show more balanced rental markets and, in some cases, signs of housing shortages.
“In cities like Vaasa, rental housing is already in short supply,” Karlsson explains. “The situation is different in the capital region where oversupply is still hurting returns.”
High vacancy rates in Helsinki discourage new investment. At the same time, banks have tightened lending rules, making it harder for buyers.
Interest rates are no longer the main barrier. The 12-month Euribor rate is about 2.15 percent. In June, the average interest rate for new investment loans was 3.1 percent.
“At three percent interest, investments can make sense,” Karlsson says. “If you cannot break even at that rate, the property is likely too expensive.”
He warns that relying on quick property value gains without considering rental income is no longer a reliable approach.
“During the boom, some investors bought expecting prices to rise fast even with negative cash flow. That strategy does not work anymore,” he adds.
Another recent change affects the rental market. Since August, student housing support shifted. Students moved from Finland’s general housing allowance system to a smaller housing supplement tied to study grants.
Karlsson notes this is pushing students to seek cheaper rentals, shared apartments, or dormitories.
“Students helped drive demand for studio apartments. Now that demand is easing,” he says.
Looking forward, Karlsson expects property investment in Finland to demand more care and selectiveness.
“I don’t think the rental market will permanently weaken for investors,” he says. “But success will depend on picking the right properties and ensuring positive cash flow.”
