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Forest property market review II/2022 – Market price level & inflation

Strong demand for forest properties continue in Finland

The sales of forest properties have continued in the second quarter of 2022 without major setbacks. The demand for forest properties is still strong. However, the number of sales in the beginning of the year is smaller than the previous year, even though a record was set again in terms of euros. This can be explained both by the abundance of harvestable timber on the properties for sale and by the increase in the market price level.

Although the rise in the price level of the forest property market continues to be very strong, it no longer reaches the peak readings of last fall. However, the annual change, at the moment, is still +10.1%. Also, the stumpage prices have been developing favorably over the summer.

Measured from the beginning of the year, inflation has already exceeded the growth rate of the market price level. This means that the real price level for the beginning of the year is negative. The average change in the market price level of forest properties in Finland is described by the Forestland Investment Finland’s market price index (see figure).

Professional buyers have been active

The share of professional buyers has already risen to more than half of the volume of the entire public market, measured both in hectares and in euros. In terms of the number of transactions, professional investors bought more than a third of the forest properties. In the first half of year 2022, the forest properties for sale have typically been well-stocked and valuable properties, which professional buyers are particularly interested in. Investing in forest is still of great interest for both professional and private investors in Finland.

Forestland Investment Finland Ltd

Founded in Joensuu, Finland, in 2013, Forestland Investment Finland Ltd (FIF) is the leading expert of forestland property market in Finland. The company provides a full range of forestland property business solutions for both private and institutional forest investors.

FIF monitors continuously and meticulously the forestland property market in Finland. FIF publishes Market Price Index that measures the performance of Finnish forestland property market. The Index is based on the sales comparison approach (SCA).