The drop in rents shows oversupply and now also subsidy cuts

In the rental housing market we are in an exceptional situation throughout the country: the decline in freely financed rents is now wide-ranging, and no longer only tells about the oversupply of rental apartments.

Statistics Finland previously reported that rents for self-financed apartments fell in the last quarter of 2025 at the level of the whole of Finland for the first time in the history of statistics.

In the oversupply-ridden capital region, non-financed rents fell by 1.3 percent in October–December, in the rest of Finland by 0.5 percent.

Finland Economist for Landlords Eemeli Karlsson says that rents are now also falling in medium-sized and smaller cities, where the rental housing market could be characterized as tight: there has been more demand than supply. Such localities are, for example, Vaasa and Lappeenranta.

In Vaasa, rents fell by 2.4 percent, in Lappeenranta by 1.7 percent and in Vantaa by 1.6 percent. In total, rents declined in 23 cities.

“Perhaps this is a matter of the broader economic picture, i.e. the tenants’ financial status and ability to pay. Subsidies have weakened, and especially the weakening of the housing subsidy is visible in the background. I don’t see any major changes in the market itself,” says Karlsson.

Executive director of Vuokralaiset ry Anne Viita reminds that housing is the biggest expense for families.

“Housing expenses should be about 25 percent of income. Compared to that, the direction of the rent decrease is correct,” says Viita.

State According to Statistics Finland, the rents of subsidized and affordable Ara apartments have risen at the same time as the rents of market-based rental apartments have fallen.

According to Anne Viida of Vuokralaiset ry, this is because Ara rents are determined based on the cost principle. All expenses must therefore be covered by rental income.

“We already have municipalities where the Ara rent is the same as the market rent.”

The level of Ara production starts to decrease in the year that has started due to public finance savings and cuts in interest subsidy powers.

In the opinion of Eemeli Karlsson, the lessors, the abundant Ara production in recent years has made the market situation even more difficult.

Started a year will not change the situation in the rental market, says Karlsson.

“Now there is a shortage of rental apartments, but I don’t see one in the near future. We still have a lot of properties that will only be used for rental.”

Karlsson would let the market adjust itself with the times without the intervention of public authorities. For example, there have been proposals from politicians for the temporary removal of the transfer tax paid in connection with the sale of housing.

“I see such actions as a bit dangerous, because they mess up the market,” says Karlsson.

“Sometimes the best course of action is simply to do nothing.”

According to Anne Viida, the decrease in rents will not remain permanent in places driven by employment and education.

“There will be problems in places that benefit from immigration when non-profit production does not start and subsidized loans are not given. Maybe we should talk about housing policy in a new way and think about what good housing policy and good housing are.”

Correction January 16 at 11:10: The news previously stated that rents for Ara apartments have not fallen as sharply as for market-based rental apartments. The rents of Ara apartments have increased compared to the situation a year ago.