The latest Catella Market Tracker for real estate investments in Finland has revealed that across Europe, around €60.5bn was invested in residential real estate last year, with residential investment now surpassing investment in retail property (offices remain the largest sector).

In Finland, €8.9bn was invested in real estate last year, with was the second highest year on record and the share of residential construction investments doubled last year to reach €1.69bn (19% of total investment), with institutional housing investment (build to rent) remaining in third place after office and retail property.

According to Catella, this shows that investment in residential property in Finland is behind the curve, compared to the rest of Europe, as it has still not overtaken residential property investment.

The report added that the Finnish economy should grow 1.8% in 2019, with similar growth expected for 2020 and 2021.

Lastly, Catella noted that demand for rental apartments in Finland remains high, especially for small apartments in large cities. Over the past 10 years, nominal rents in the Helsinki metropolitan area have risen by an average of around 3.8% per year. In other large cities, the increase has been somewhat lower, with the annual rent increases fluctuating on average between 2.5% and 3.5%.