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Forest property market review III/2023 – Development of market price level turned downwards

Prices per hectare and cubic meter decreased

Traditionally the forest property market price level has been measured in price per hectare and price per cubic meter. The average purchase price per hectare for forestland on the third quarter of the year has decreased 2,9 % compared to previous year and 4,0 % compared to previous quarter.

Respectively, when assessing the purchase price divided by the volume of merchantable timber in the transactions of the third quarter, the decrease of prices is 1,6 % compared to Q3 previous year and 3,3 % compared to Q2/2023.

However, these pure averages do not reveal the whole truth about the development of the prices. The average growing conditions of the sold properties were in fact better in the third quarter than before, as the proportion of peatlands and poor sites decreased. On the other hand, the mean timber volume and the proportion of sawlog, the major factors in the price of forestland properties, decreased by 1,3 % and 0,6 % respectively compared to last year.

Forestland properties cheaper measured in value of timber

In Finland, the stumpage prices have risen rapidly during the past years, mainly caused by increased demand for roundwood in the whole Baltic Sea region. The average stumpage prices have increased 35 % during the last three years. Although the stumpage prices reached their peak in the end of May 2023, the prices are still notably high, with no dramatic decrease of prices in sight.

Consequently, the value of timber at the sold properties has increased more rapidly than the market value of forest properties, leading to 7,7 % decrease in the average ratio of purchase prices and value of timber.

Additionally, the demand for forestland has decreased, as the professional investors have not been as active as before. On the other hand, the supply of forest properties has not decreased but rather increased. In conclusion, now the market provides better opportunities for forest investors, both private and professional, to find suitable forestland properties with competitive revenues.

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).