The Finnish forestland property market had an upward run during 2024, with market prices rising by 1.3 %, according to the Market Price Index by Forestland Investment Finland. Transaction volumes also increased, demonstrating a functional market.
Despite rising interest rates impacting the forest property sector, market prices rose annually in both 2023 and 2024. However, this does not imply continuous price growth: between summer 2023 and summer 2024, prices decreased by 3.9 %. Notably, the peak market prices from summer 2023 have not yet been surpassed at the end of 2024. There was notable regional variation in the development of market price level. In Northern Finland, prices increased by 4.0 %, whereas in Lapland, they decreased by 2.5 %. In Southern Finland, prices rose by 3.0 %, but in Central Finland, they fell by 1.7 % annually.
Increasing market activity
In 2024, the number of forest property transactions turned upwards after two years of decline. Starting from the summer, market volume increased significantly, with 1,904 transactions recorded throughout the year for publicly announced properties over 10 hectares of forest land. These transactions included 62,800 hectares of productive forestland. In the north, transaction volumes rose considerably: in Lapland by 33 % and in Northern Finland by 18 % compared to 2023. In the south, growth was more moderate.
“The rise in forestland prices is partly derived from increased timber prices, attracting both private and professional buyers,” says Mika Venho, founder-entrepreneur of Forestland Investment Finland. “Additionally, decreased interest rates enhance the attractivity of forest investment, especially among institutional investors. It remains to be seen how demand by domestic forest funds recovers, or whether redemption restrictions in other property funds reduce interest in forest funds as well.”
Record supply, picky buyers
The growth in the number of forest property transactions has been supported by abundant supply. In 2024, a record 2,388 properties, covering 77,400 hectares of forest land, were announced on the market. “The proportion of properties remaining unsold has tended to increase rather than decrease, as buyers have had the luxury of choice,” Venho notes. “There aren’t many players in the market who are willing to buy any forestland property as long as the price is affordable.”
For more information, contact the Head of Analytics and Asset Intelligence:
Eero Viitanen, eero.viitanen@sijoitusmetsat.fi
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