● THE FINNISH PROPERTY MARKET NEWSEC PROPERTY OUTLOOK • AUTUMN 2020
THE FINNISH PROPERTY MARKET
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NO RECORDS BROKEN – BUT THE TRANSACTION MARKET REMAINS SOLID
The Finnish economy continues to perform relatively well during these strange times. The decline in GDP growth in Q2 was surprisingly limited, at just -4.9% compared to the year before, with growth in June rising by 0.9% when compared to May. Unemployment in the country has also only risen by around 2%, to 7.9%. These figures are substantially stronger than most other European economies. Finland’s economy has also been supported by the country managing to avoid many of the negative consequences of covid-19. The country has been least impacted by the virus of
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the Nordic countries, perhaps partly thanks to a strict, early lockdown policy, which has since eased substantially. Nevertheless, the forecasts for the end of the year remain quite negative, with GDP growth of around -5.5% expected in 2020. The Finnish real estate market saw a record quarter in Q1, with a transaction volume of EUR 2.6 billion, but a very weak Q2, at just EUR 0.6 billion, which constituted a record low in the past five years. Investment volume is expected to pick up in Q3 and Q4, as both low interest rates and volatile
stock markets are expected to drive volumes. Investors are increasingly looking to target Finland, with particularly high demand for prime properties with solid tenants, long leases and almost fully let spaces. All in all, expectations of a strong end to the year abound, with an expected total transaction volume of between EUR 5 and 6 billion in 2020, in line with the historical average.
Contact: Olli-Pekka Mustonen olli-pekka.mustonen@newsec.fi
