Economy

Finns Seek More Affordable and Family-Friendly Housing as Market Shifts

A new survey by S-Pankki reveals growing dissatisfaction among Finns with the types of housing being built, as demand shifts toward larger, more affordable family homes while small apartments remain unsold.

Over a third of Finns believe new housing is being constructed primarily for investors, a perception linked to the surge in small-sized apartments built around the early 2020s. Yle reports that this trend is now declining, with construction activity and building permits decreasing. S-Pankki’s economist Janne Ronkanen notes that the market is slowly adjusting, with developers increasing the average size of new apartments—moving from studios to three-room and larger units.

Despite the shift, MTV Uutiset highlights that 37% of survey respondents feel current construction meets the needs of ordinary people poorly or very poorly. Half of Finns, however, believe it aligns with demand. Dissatisfaction is most pronounced in growth centers such as Uusimaa, Southwest Finland, and Pirkanmaa, where urbanization and immigration have driven demand for smaller apartments.

Affordability and Practicality Top Housing Wishes

Finns’ top priorities for new housing include affordability, modern floor plans, and proximity to nature. Yle notes that while older apartments have seen price declines, new apartment prices have not dropped significantly. Ronkanen explains that investor activity has sharply decreased following the housing market downturn, leaving many small apartments unsold.

The housing shortage remains a pressing issue. Yle states that Finland needs over 30,000 new apartments annually, but fewer than 20,000 have been built in each of the past three years. Ronkanen predicts this shortfall will persist in 2024 and possibly 2025, as construction projects take time to adapt to changing demand.

The survey, conducted by Kantar for S-Pankki in April, included responses from over 3,000 Finns (MTV Uutiset). The findings underscore a mismatch between housing supply and demand, with family-sized homes now in highest demand.

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