There is currently a record-breaking amount of supply on the forestland property market. At the same time, selling times have lengthened, and the proportion of properties remaining unsold has increased.
Increasing supply
During this year (January–October), 2,000 properties larger than 10 hectares of forestland have come up for public sale, which is 8% more than during the same period in 2023 and 12% more than the average over the past five years. October was an exceptionally busy month for new sales announcements, with slightly over 300 forestland properties entering the market. Compared to last year, the supply of forestland properties has increased particularly in Central and Northern Finland.
Despite the increased supply, the number of forestland property transactions was on a downward trend until last summer, and the recent growth in transaction numbers has not matched the increase in supply. This is reflected both in longer selling times and a larger proportion of properties remaining unsold.
Current market situation
In the current market situation, sales without a deadline for offers have become more common, which partially explains the longer selling times. Additionally, real estate brokers are also setting longer marketing periods. Nationwide, already one in five forestland properties that go on sale remain unsold, which is a third higher proportion than a year ago. Both the average selling times and the proportion of unsold properties increase from south to north.
“A significant factor in the reduced demand for forestland properties is the decrease in activity of institutional forest investors to less than half of peak years“, explains Eero Viitanen, Head of Market Intelligence and Valuations at Forestland Investment Finland.
“The purchases by professional entities are also more selective in the cooled-down market“, continues founder-entrepreneur Mika Venho. “At least it can be said that the forestland market has become less of a seller’s market than in years“, ponders Venho.
More properties are left unsold in the north
The structure of forestland property supply has changed in recent years. Properties with a higher volume of timber and with less area of sapling stands are now coming up for sale. Properties remaining unsold tend to be of lesser quality, meaning lower volumes of timber and less fertile land. On the other hand, these differences are partly explained by geography: the proportion of unsold forestland properties is larger in the north.
For more information, contact the Head of Analytics and Asset Intelligence:
Eero Viitanen, eero.viitanen@sijoitusmetsat.fi
Or leave a contact request: https://sijoitusmetsat.fi/en/contact-us/