The Suomen Sijoitusmetsät Market Price Index provides a reliable picture of the long-term development of price levels in the forest property market. It compares the price levels of similar properties over the last 12 months (to 1 October 2023) with the preceding 12-month period. In mainland Finland, the price level increase during this period has been 4.2% (Figure 1).
Figure 1. Development of the Forest Property Market Price Index and Consumer Price Index 2017–2023 (to early October).
Per-hectare and per-cubic-metre prices turned downwards in late summer
Traditionally, the price level of the forest property market is monitored using average per-hectare prices. The average price per forest land hectare has decreased by 2.9% from a year ago and by 4.0% from the previous three-month period in the third quarter of the year. Similarly, the price per cubic metre (sale price divided by timber volume) has decreased by 1.6% compared to a year ago and by 3.3% compared to the previous quarter. However, these figures do not tell the whole story. Forest properties sold in late summer have had better growth potential than last year. The share of peatlands and poor-quality properties has decreased. On the other hand, the average growing stock in transactions is 1.3% smaller and the sawlog share 0.6% lower than a year ago.
Based on statistics from the National Land Survey of Finland, the average per-hectare price of forestry land has increased by 8.7% from last year in the first part of the year. It should be noted that nearly half of these transactions are not public, and they also include poorly productive and unproductive land. By definition, these statistics cannot be said to represent the development of pure forest land market prices, as market price levels should only account for transactions made in free, public markets. Based on National Land Survey statistics, an average of €4,218/ha was paid in the first part of the year, whereas in the public representative transactions recorded by Suomen Sijoitusmetsät, the average per-hectare price has been €4,837.
Forest properties more affordable relative to timber value than last year
Strong timber prices have pushed longer-term average prices substantially higher. Over the past three years, the increase in annual average prices has been as much as 35% (Figure 2). This is also reflected in the fact that forest transactions are being made at prices 7.7% more favourable relative to timber value than during the corresponding period last year. This development, together with reduced purchasing by professional buyers, opens excellent opportunities to find properties with better returns than in recent years in the forest property market.
Figure 2. Development of the Forest Property Market Price Index and Consumer Price Index 2017–2023 (to early October).
Suomen Sijoitusmetsät’s systematic market monitoring covers all of mainland Finland. The market monitoring is divided into four major regions: Southern Finland, Central Finland, North Ostrobothnia and Kainuu, and Lapland. Forest properties coming to market are monitored daily from over 30 public sales channels. The number of sold properties in the database has exceeded 15,000 as a result of years of monitoring. Price data for completed transactions are obtained from the National Land Survey’s transaction price register, and up-to-date timber assortment prices from the Finnish Forest Industries Federation’s weekly price statistics. Precise and systematic classification of forest property representativeness ensures that our market analyses are based as accurately as possible on the forestry values of sold properties.
Suomen Sijoitusmetsät is a Joensuu-based forest property market specialist, founded in 2013. The service portfolio includes nationwide forest property acquisition, management, real estate brokerage, valuation, and data production services. The company is employee-owned and its mission is to strengthen a fair and efficient forest property market for all parties, based on uniquely reliable and comprehensive data collected from the forest property market that is unparalleled even globally.
For further information and questions related to the development of the forest property market in your region, contact Head of Forest Information Eero Viitanen (eero.viitanen@sijoitusmetsat.fi).
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