Housing prices dropped again in May. This marks the 12th consecutive month of decline for Finnish property values.

Statistics Finland released the latest data. Old apartments cost 1.3% less than they did in May last year. The drop hit hardest in Finland’s biggest cities.

Big Cities See Steeper Falls

The six largest cities experienced a 2.3% decline in prices compared to last year. Vantaa, just north of Helsinki, had the worst decline at 5.2%. I have seen similar patterns in other Nordic markets during economic slowdowns.

Outside these major cities, prices rose slightly by 0.2%. This urban-rural split is a common phenomenon when city economies struggle while smaller areas remain stable.

Central Bank Sounds Alarm

The Bank of Finland issued a warning last week. While the financial system remains stable overall, global uncertainty poses a threat to this balance.

The central bank fears that a slow recovery will further drag down the housing and real estate markets. This would increase risks for banks and property investors. Finland’s economy started growing slowly in 2024, but recovery has stalled this year.

Labour market conditions worsened in the spring of 2025. Housing construction faces serious problems. Property investment deals have become difficult to close.

What This Means

The central bank’s report was clear: “Housing prices continued to decline compared to a year ago, and housing construction and property investment were experiencing difficulties.”

If Finland’s economic recovery stays weak, several things could happen:

• Banks face higher credit risks
• Real estate investors struggle longer
• Forced property sales increase
• The housing downturn drags on

This situation reminds me of what happened in Ireland after the 2008 financial crisis. When economies stagnate, property markets often take years to recover. Finnish buyers may find better deals now, but sellers continue to face pressure.