According to nationwide market monitoring by Suomen Sijoitusmetsät, more forest properties were listed for sale in the first half of 2023 than ever before in January–June during the monitoring period 2017–2022. The chart shows 2020–2023. The underlying figures for your own graphics are available from Head of Forest Information Eero Viitanen.
More forest properties were listed for sale during the first half of the year than ever before in January–June during the monitoring period 2017–2022, according to Suomen Sijoitusmetsät’s nationwide market monitoring.
Particularly large numbers of properties were listed in May and regionally in Southern Finland.
“However, transaction volumes have not increased in the same proportion. This is probably due to the summer holiday season following the period of high supply, which has delayed the closing of deals. Based on market data, there are also indications that the share of unsold properties has grown,” says Eero Viitanen, Head of Forest Information at Suomen Sijoitusmetsät.
In a situation of abundant supply, knowing the right price for an individual property becomes critical.
“The professional expertise of the seller, buyer, or broker and an accurate knowledge of market price levels are the best protection against costly mistakes. A realistic asking price also serves the seller’s interest.”
An exception in the property market: prices are rising
Unlike the rest of the property market, forest property price levels are holding steady. The Market Price Index for forest properties rose 6.4 per cent nationwide from June 2022 to June 2023. The change was largest in Central Finland (7.5%) and smallest in Lapland (5.4%) and Southern Finland (5.5%).
“Currently, the market price level of forest properties is developing very much in line with inflation. The rise in timber price levels is the driver behind the increase in forest property prices,” Viitanen says.
During 2017–2023, the Market Price Index for forest properties rose most rapidly at the end of 2021. As prices rose, forest investors’ required returns fell. The market is now in a period of change.
“Investors’ required returns have begun to rise,” Viitanen says.
Transaction prices relative to timber value are falling
In 2022, the share of professional buyers in forest property transactions grew to 43 per cent by number and as much as 56 per cent measured in euros.
During 2023, the share of professional buyers in market volume has decreased slightly. However, professional buyers still acquire approximately two out of five publicly listed properties and over half of the hectares.
A notable feature this year is that forest property transaction prices relative to timber value have begun to decline after several years of increases. The development is partly due to rising timber prices and partly to slower growth in market price levels.
“As the share of professional buyers decreases, private buyers also have better opportunities to find higher-yield properties than they have had in years. Forest investment is largely based on the correct purchase price, and knowing the right purchase price is of paramount importance,” says Mika Venho, Chairman of the Board of Suomen Sijoitusmetsät.
The topic has also been covered here:
Link to STT’s original article
Link to YLE article on Northern Finland market
Link to Kauppalehti article (requires login)
Link to Maaseudun Tulevaisuus article (requires login)
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