Finland

The Finnish housing market in mid-2025 is gradually recovering after a significant slowdown. Rising interest rates in recent years led to fewer home sales and price drops, with average prices of old dwellings down about 1.3% year-on-year and sharper declines in major cities. The average price per square meter is approximately €2,609 for second-hand apartments and €4,954 for new dwellings, with national prices forecast to rise by 1.5% in 2025. Around 69% of Finns own their home, while roughly 31% are renters. Rental markets remain strong in urban and university cities, with national average gross rental yields about 5.32%. Median monthly rents are roughly €15–€20 per sqm, varying by city and property type. Publicly owned housing plays a significant role, especially in Helsinki, where 70% of land is city-owned and leased to social housing providers. Helsinki alone has about 50,000 publicly owned housing units. Social housing in Finland refers to rental public housing, often targeted at lower-income or special-needs groups, and is run mainly by municipalities rather than non-profits. Public housing and social housing are largely synonymous in urban Finland, but there is a distinction: "normal rental housing" is open to the general public, while "housing for special groups" operates more as a social service, prioritizing those with special needs. Overall, social housing accounts for about one quarter of new residential construction in recent years.

Finland’s housing crisis is marked by a severe slowdown in new construction, rising homelessness, and a chronic undersupply of affordable homes, especially in major cities. In 2023, housing construction plunged to its lowest level in a decade, with only about 21,000 new units started and completions dropping by nearly half from the previous year. The pace of building permits and new construction remains subdued, with experts warning that meaningful new housing supply may not reach the market before 2027. This lack of supply is most acute in urban centers like Helsinki, Espoo, and Oulu, where population growth outpaces available housing. The housing stock is dominated by owner-occupied dwellings, which many cannot afford, while much of the newly built housing is too large and expensive for the needs of lower-income and single-person households. Meanwhile, the inventory of unsold new homes remains high, further suppressing new development. The crisis particularly affects low-income individuals, young people, migrants moving for work, and those with special needs. Homelessness, after years of decline, is again rising: in 2024, the number of people experiencing homelessness increased for the first time in over a decade, with particularly sharp increases in street homelessness across major cities. Over 60 percent of Finland’s homeless live in the Helsinki region, with many more at risk due to gaps in the benefits system and the complexity of accessing support.

The Finnish national government approaches affordable and sustainable housing through a combination of legislative duties, financial mechanisms, and partnership agreements with municipalities. The state’s role is defined by the Constitution, which mandates public authorities to promote everyone’s right to housing and support individual housing initiatives. Recent government activity has focused on both supply and affordability but has also included significant welfare cuts. As of 2025, eligibility for the general housing allowance has tightened: household assets are now considered, and the allowance is no longer available for owner-occupied homes, reducing support for thousands of households. These changes primarily aim to achieve public spending savings rather than expand affordability. Key ongoing national programs include the long-standing Housing First model to combat homelessness, investing in social rental housing, and the use of ARA investment grants to support housing for special groups and the long-term homeless. The government also implements the MAL agreements—multi-year partnerships with major cities—to coordinate land use, housing, and transport policies. These agreements fund sustainable urban development, support climate-friendly housing, and prioritize affordable solutions in high-demand areas. To support ownership, Finland maintains the ASP loan scheme for young first-time buyers, while interest subsidy loans and exemptions from property transfer taxes further help. However, with new welfare restrictions and limited expansion of supply, the government’s current approach balances fiscal discipline with continued, albeit reduced, targeted support for the most vulnerable groups.

Cooperative housing in Finland remains a **minor but growing segment** of the national housing landscape. Historically, housing cooperatives have played a limited role compared to strong traditions of home ownership and municipally managed social housing. As of 2024–2025, there are about **50 active cooperative housing projects** in the country, and they account for only a **small share of all housing units**—the cooperative model is still a niche alternative. The Finnish **central government is now actively exploring cooperative housing** as a way to address the rising affordability gap. Cooperatives target those not eligible for social rental housing but who cannot afford market-rate ownership or rentals. To support this, the state’s Housing Finance and Development Centre (ARA) has since 2019 provided **subsidies for group-based housing cooperative construction**, launching about a dozen pilot projects across Finland. These efforts aim to test and expand cooperative models, especially in urban development zones like those negotiated with the City of Helsinki. The **main challenges** facing cooperative housing are institutional constraints and the need for suitable land, financing, and regulatory support. While interest is growing, the sector’s future expansion depends heavily on resolving these obstacles and on continued or increased state backing. National policy continues to focus on increasing affordable supply and supporting community-led housing initiatives, with cooperatives viewed as a promising, though still experimental, complement to public and private housing.

In Finland, several key organizations have actively advocated for addressing the housing crisis and promoting more affordable, sustainable urban housing. The Y-Foundation (Y-säätiö) stands out as a major non-profit dedicated to ending homelessness and increasing affordable rental housing, working closely with municipalities and NGOs using the Housing First model. Sininauhasäätiö is another foundation offering affordable and assisted living solutions. The Finnish Housing Finance and Development Centre (ARA) is a central government body supporting low-cost housing construction, while large municipalities such as Helsinki, Espoo, and Vantaa play a crucial role in land use and housing development. From the real estate sector, companies like Kojamo (through its Lumo brand) and SATO are investing in sustainable, energy-efficient housing and integrating renewable energy solutions. CapMan Real Estate is also pioneering EU Taxonomy-aligned new builds focused on sustainability. In the startup world, companies like Expandia Moduulit are innovating with modular housing solutions on underutilized urban spaces. Academia contributes through research institutions such as Aalto University and the University of Helsinki, which conduct studies on sustainable urban development and housing policy. These actors, alongside local NGOs and foundations, form a robust network for collaborative efforts to tackle the housing crisis.