The further north a forest property is sold, the greater the premium the seller receives for publicly brokered properties compared with the average forest property transaction, according to data from the National Land Survey of Finland and Suomen Sijoitusmetsät.
Suomen Sijoitusmetsät, which monitors forest property markets, has analysed 2021 forest property transactions to determine the impact on final sale price when a property was listed through public sales channels.
The differences are significant. Publicly brokered forest property transactions have commanded price premiums of over one-third compared with average prices.
“The largest difference in the average price per hectare between publicly brokered and all completed forest property transactions was 36 per cent in Lapland. In Kainuu and North Ostrobothnia, the difference was 29 per cent, in Central Finland 23 per cent, and in the southernmost part of Finland 25 per cent,” says Eero Viitanen, Head of Forest Information at Suomen Sijoitusmetsät.
Seven per cent sell independently
The majority of forest properties brought to public markets were sold through professional brokers. Approximately seven per cent of publicly sold forest properties did not involve a broker.
The alternative to public sales – for example, through real estate agents and electronic marketplaces – is a private transaction directly between seller and buyer.
In direct transactions, the forest property seller typically contacts known buyers, usually professional forest property purchasers. Information about private buyers seeking forest properties may also be conveyed through conversations between neighbours, for example.
“Buyers of forest properties can also contact forest owners directly to inquire about their interest in selling. However, such contacts to forest owners are still in the minority,” Viitanen says.
Most important: know your property’s value
Viitanen says that despite lower average prices, direct, private transactions may suit some sellers. A transaction arranged privately between seller and buyer is often easier, faster, and cost-free for the seller.
“From the seller’s perspective, the most important thing is to be aware of the true value of their forest property and to understand what they are selling. Compared with a direct sale, a public sale is more laborious and slower, but according to this study, it has, on average, rewarded the seller very handsomely in financial terms.”
He compares a public listing for a forest property to competitive bidding, which very often results in a final price that exceeds the seller’s own asking price.
“Last year, the actual transaction prices for properties put up for public sale were higher than the asking price in 80 per cent of the deals. On average, the transaction price exceeded the asking price by 20 per cent.”
Background
- According to the National Land Survey of Finland, 3,062 forest property transactions over 10 hectares were completed in Finland last year. The average transaction price was €125,500. The average price for representative publicly brokered property transactions was €132,600.
- A large proportion of forest properties change ownership through family arrangements. Transactions between relatives are not included in these figures.
- Major regions in the press release map:
- Southern Finland includes the regions of Southwest Finland, Uusimaa, Kanta-Häme and Päijät-Häme, Kymenlaakso, South Karelia, and Satakunta in their entirety, as well as the southern parts of the Pirkanmaa and South Savo regions.
- Central Finland includes the regions of South Ostrobothnia, Central Ostrobothnia, Ostrobothnia, Central Finland, North Savo, and North Karelia in their entirety, as well as the northern parts of the Pirkanmaa and South Savo regions.
- Northern Finland includes North Ostrobothnia and Kainuu.
- The Lapland major region comprises the Lapland region.
Contact persons
Eero Viitanen
Head of Forest Information
Suomen Sijoitusmetsät Oy
Tel. 050-3274140
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