The volume of property transactions remains high in Finland. Strong investment demand has pressed down yields, which have reached record low levels. The improving economic conditions support office rental markets, where a clear turn to the better has taken place during the winter. The volume of new rental agreements, as well as rental levels in the best areas have increased during the past six months. The expectations for the development of retail rents are now clearly less positive than in the office markets.
Residential construction volumes increased significantly in 2016, supported by strong investment demand. Due to active new development, together with the positive development of market values, residential became the largest sector in the Finnish property investment market in 2016. An increase in supply is now seen in the residential rental markets, where the increase in rents seems to have almost stopped in all major cities. Strong rental demand supports, however, positive expectations with regard to both stable rental growth and high occupancy rates.
Read more at the new KTI Market Review.