Finland’s Rental Market Shocker: What Landlords & Renters Must Know for 2025–2029

Table of Contents

• Executive Summary: Key 2025 Rental Market Takeaways
• Current Rental Price Trends and Regional Hotspots
• Supply & Demand Dynamics: Urban vs. Rural Shifts
• Legal Framework: Recent & Upcoming Changes (2025)
• Taxation, Subsidies & Financial Incentives for Landlords and Tenants
• Compliance Challenges: Tenant Rights, Landlord Obligations, and Lease Regulations
• Key Market Statistics: Vacancy Rates, Yields, and Demographics
• Major Drivers: Immigration, Student Housing, and Economic Growth
• Future Outlook: Projections for 2025–2029
• Official Resources & Guidance for Stakeholders (e.g., Kela.fi, vero.fi, ym.fi)
• Sources & References

Executive Summary: Key 2025 Rental Market Takeaways

The Finnish rental market in 2025 is characterized by sustained demand, evolving legislation, and a moderate but persistent housing shortage in urban centers. The ongoing urbanization trend continues to concentrate rental demand in Helsinki, Espoo, Tampere, and Turku, driving up rental prices and keeping availability tight in these cities. Latest data from Statistics Finland shows that in 2024, the average rent for non-subsidized dwellings rose 2.5% nationwide, with capital region rents increasing at a slightly higher rate. The rental sector comprises approximately 32% of all households, with the proportion even higher in metropolitan areas.

Legislatively, the Finnish rental market remains governed chiefly by the Act on Residential Leases (481/1995), which outlines tenant protections, landlord obligations, and dispute resolution mechanisms. Recent regulatory updates, including digitalization of rental agreements and strengthened requirements for energy efficiency disclosures, reflect broader government policy objectives in sustainability and consumer protection. The Ministry of Justice has confirmed ongoing efforts to streamline dispute resolution and enhance tenant rights, particularly in cases involving security deposits and notice periods.

Compliance with fair rental practices and anti-discrimination provisions remains a top priority. The Finnish Landlord Association and Finlex emphasize the importance of written contracts, transparent rent setting, and adherence to the non-discrimination act (1325/2014), which prohibits bias based on ethnicity, age, or family status in housing.

Looking ahead, the outlook for 2025-2027 suggests moderate rental price growth, especially in growth corridors and university towns. The government’s ongoing housing investment program and new construction incentives, as detailed by the Ministry of the Environment, aim to increase rental housing supply, but bottlenecks remain due to rising construction costs and zoning delays. Demographic trends, such as increased immigration and continued urban migration, are expected to sustain demand.

• Rental demand will stay high in urbanized regions.
• Regulatory focus is on tenant protection, digitalization, and sustainability.
• Compliance is reinforced through updated legal guidance and monitoring.
• Moderate rent increases (2–3% annually) are likely in metropolitan areas.
• Supply constraints persist, but new build efforts may ease pressure in the medium term.

In summary, the Finnish rental market in 2025 is robust, regulated, and evolving, with key trends pointing toward gradual expansion of supply, continued policy attentiveness to tenant rights, and ongoing urban-centric demand.

Current Rental Price Trends and Regional Hotspots

The Finnish rental market in 2025 is characterized by moderate price increases, regional disparities, and evolving demand patterns. According to the latest data from Statistics Finland, average rents for non-subsidised dwellings increased by approximately 1.5% nationally in 2024, continuing a trend of gradual price growth seen over the past few years. The metropolitan area of Helsinki, Espoo, and Vantaa remains the country’s most expensive rental hotspot, with average rents per square metre significantly higher than in other regions.

• Helsinki Metropolitan Area: In Helsinki, average rents for non-subsidised apartments reached nearly €21/m² per month in early 2025. Espoo and Vantaa followed closely, both exceeding €17/m² per month. The demand for small apartments (studios and one-bedroom units) remains especially strong, driven by young professionals and students.
• Other Major Cities: Tampere and Turku, Finland’s second- and third-largest urban areas, also saw above-average rent increases. In Tampere, the average rent for a non-subsidised dwelling is now around €15/m², while Turku approaches €14.5/m². Both cities are considered regional hotspots due to ongoing urbanisation and university-driven demand.
• Eastern and Northern Regions: In contrast, rental growth in regions such as North Karelia and Lapland remains subdued, with average rents as low as €11/m² or less. Demographic trends, including population decline and out-migration, keep supply ample and price growth minimal.

Recent legislative updates, such as the 2023 amendments to the Finnish Act on Residential Leases (Finlex Data Bank), have reinforced tenant protections, ensuring that permissible rent increases remain closely regulated and must be clearly stipulated in lease agreements. The City of Helsinki provides guidance on lawful rent increase procedures, which typically require written notice and justification.

Looking ahead, the outlook for 2025–2027 suggests continued moderate rental price growth in urban hotspots, underpinned by steady migration to cities and limited new housing supply in central locations. However, in rural and shrinking regions, oversupply and demographic pressures are expected to keep rents stable or even slightly declining. Policymakers and housing authorities are closely monitoring the market to ensure compliance with rent regulations and to support housing affordability for vulnerable groups.

Supply & Demand Dynamics: Urban vs. Rural Shifts

The Finnish rental market is experiencing significant supply and demand shifts, particularly between urban and rural areas. In recent years, urban centers such as Helsinki, Espoo, Tampere, and Turku have seen sustained demand for rental housing, driven by ongoing urbanization, internal migration, and the influx of both domestic and international students and workers. According to Statistics Finland, the urban population continues to grow, while many rural regions face population decline and aging demographics.

This urban concentration has led to higher demand for rental apartments in metropolitan areas, contributing to low vacancy rates and steady or rising rents, especially for small and medium-sized units. For instance, in Helsinki, the average rent for a non-subsidized one-bedroom apartment reached €27.7/m² in early 2024, with similar trends projected for 2025, while in rural municipalities, rents may be less than half of that figure. The Housing Finance and Development Centre of Finland (ARA) reports that the supply of new rental housing has increased in urban regions, but demand still often outpaces supply, particularly for affordable apartments.

In contrast, many rural municipalities are experiencing an oversupply of rental properties as residents migrate toward urban centers for education and employment opportunities. This has led to increased vacancy rates and stagnant or declining rents in these areas. The demographic shift is further accentuated by Finland’s overall low population growth and aging population, challenging the sustainability of rural rental markets. The Ministry of Economic Affairs and Employment of Finland highlights that labor market dynamics and regional economic disparities will likely sustain this urban-rural split for the foreseeable future.

Legal and regulatory frameworks also influence these dynamics. The Finnish Act on Residential Leases ensures tenant protections and stipulates clear rules for rent increases and contract terminations throughout the country, applying uniformly but with practical implications varying by location due to differing market conditions (Finlex). Compliance with housing quality and safety standards is enforced by local authorities and remains high in both urban and rural areas, but investment in new rental stock is far more attractive in cities.

Looking ahead to 2025 and beyond, the Finnish rental market is projected to remain characterized by this urban-rural divergence. Urban rental demand is likely to stay robust due to continued migration and constrained ownership affordability, while rural markets will face persistent challenges of excess supply and limited new investment. Policymakers and housing authorities are monitoring these trends, considering measures to support affordable urban housing while addressing the risks of depopulation in rural communities (Ministry of Finance).

Legal Framework: Recent & Upcoming Changes (2025)

The legal framework governing the rental market in Finland is primarily established by the Act on Residential Leases (481/1995), which outlines the rights and responsibilities of landlords and tenants. This legislation is complemented by various government decrees and guidance, ensuring transparency and stability within the sector. As of 2025, the Finnish rental market is experiencing notable regulatory attention, with a focus on balancing tenant protection and the interests of property owners.

In recent years, Finland has addressed issues such as short-term letting, security of tenure, and energy efficiency requirements in rental properties. Notably, amendments to the Act on Residential Leases entered into force in 2023, clarifying procedures for rental increase notifications and enhancing the dispute resolution process. These changes aimed to reduce litigation and encourage mediation between parties. Further, the Government of Finland initiated consultations in 2024 on proposals to streamline digital rental agreements and strengthen electronic identification for lease contracts, anticipating implementation by late 2025.

The Ministry of the Environment has continued to update building and energy regulations that indirectly affect the rental market, especially regarding energy performance certificates and mandatory improvements in rental housing stock. The updated Energy Performance of Buildings Decree (2024) imposes stricter requirements on landlords to ensure compliance with energy efficiency standards, with enforcement mechanisms outlined by the Ministry of the Environment and local authorities. Landlords are now obliged to provide energy certificates for all new tenancies and upon substantial renovations.

Regarding enforcement and compliance, the Finnish Courts and the Finnish Competition and Consumer Authority continue to play pivotal roles in resolving disputes and monitoring adherence to rental regulations. The Consumer Disputes Board offers an accessible, alternative route for tenants and landlords to resolve conflicts without recourse to formal litigation.

Looking ahead, the Finnish government is expected to further address challenges related to affordable housing supply, especially in urban centers. According to the Statistics Finland, the proportion of rental dwellings has continued to rise, with nearly 33% of all households living in rental accommodation as of 2024. With urbanization trends and the ongoing housing shortage, additional legislative reforms are likely in the coming years to encourage new rental construction and safeguard tenant rights, ensuring the market remains both competitive and equitable.

Taxation, Subsidies & Financial Incentives for Landlords and Tenants

The Finnish rental market operates within a framework of taxation, subsidies, and financial incentives that influence both landlords and tenants. In 2025, these mechanisms continue to be shaped by evolving housing policies, economic conditions, and government strategies to ensure affordability, supply stability, and market fairness.

Taxation of Rental Income
Rental income is treated as taxable income for private landlords in Finland. Landlords must declare rental income annually and are allowed to deduct certain expenses, including maintenance costs, loan interest related to property acquisition, and depreciation. The net rental income is taxed at the individual’s progressive income tax rates. Corporate landlords are subject to corporate tax rates on their rental income. The Finnish Tax Administration provides comprehensive guidance on allowable deductions and reporting obligations, ensuring compliance through regular audits and information exchange with municipal authorities (Finnish Tax Administration).

Value-Added Tax (VAT) and Real Estate Tax
Residential rents are generally exempt from VAT; however, commercial property leases may be subject to VAT under certain conditions. All property owners, including landlords, are liable for annual real estate tax, set by municipalities within limits defined by national law (Finlex – Real Estate Tax Act).

Subsidies and Support for Tenants
Tenants benefit from the national housing allowance system (asumistuet), administered by Social Insurance Institution of Finland (Kela). The allowance is means-tested and designed to help low- and middle-income households cover rental costs. The government periodically adjusts eligibility thresholds and compensation levels in response to inflation and housing market trends, with recent reforms targeting greater support for urban renters facing high rent burdens.

• In 2024, approximately 370,000 households received general housing allowance, with expenditure exceeding €2 billion (Kela).
• Student housing benefit was reformed in 2017, and no major changes are expected through 2025.

Incentives for Investors and Developers
To stimulate rental housing construction, Finland offers interest subsidies and partial guarantees for developers of affordable and social rental apartments through the Housing Finance and Development Centre (ARA). These incentives are conditional, often requiring capped rents and tenant selection criteria for a fixed period. ARA-financed projects are a significant source of new affordable rental units, particularly in growth centres.

Outlook for 2025 and Beyond
While no major tax reforms affecting rental income are slated for 2025, the outlook suggests continued government focus on supporting affordable rental supply and tenant protection. Authorities are monitoring the impact of rising interest rates and construction costs, which may prompt further adjustment of subsidies or incentive schemes to maintain market balance. Compliance enforcement is expected to intensify, particularly regarding unreported rental income and eligibility for housing allowances (Finnish Tax Administration).

Compliance Challenges: Tenant Rights, Landlord Obligations, and Lease Regulations

The Finnish rental market is shaped by a robust legal framework that seeks to balance tenant rights with landlord obligations. As of 2025, the most important statute governing residential tenancies is the Act on Residential Leases (AHVL 481/1995), which outlines the minimum standards for lease agreements, grounds for termination, and dispute resolution mechanisms. Compliance with these regulations remains a central concern for both parties in the rental sector.

• Tenant Rights: Finnish law grants tenants strong protections, including security of tenure, the right to a written lease agreement, and safeguards against unreasonable rent increases. Tenants can only be evicted on specific legal grounds, such as persistent non-payment or significant breaches of contract. The law also protects tenants from retaliatory actions by landlords, and stipulates a minimum notice period—usually three months for fixed-term leases and six months for indefinite-term leases, depending on the duration of the tenancy (Finlex Data Bank).
• Landlord Obligations: Landlords are required to maintain the property in a habitable condition and carry out necessary repairs. They must also provide receipts for payments and respect the tenant’s privacy, including restrictions on entering the rental unit without appropriate notice. New compliance challenges arise from recent amendments that increase transparency in rent setting and require landlords to disclose information about the property’s condition at the outset of the lease (Ministry of Justice, Finland).
• Lease Regulations: The standard lease agreement must specify the rent, payment schedule, and rights to subletting or assignment. Index-linking of rents is permitted but subject to clear contractual terms. The law prohibits excessive security deposits (typically capped at three months’ rent) and mandates their prompt return upon lease termination, barring justified deductions (Consumer Association of Finland).
• Compliance and Dispute Resolution: The Finnish rental market sees a steady volume of disputes—primarily over rent increases, repair responsibilities, and return of deposits. Most are resolved through the municipal Rental Dispute Board, but parties may appeal to district courts if necessary (Ministry of Justice, Finland).

Looking ahead, compliance challenges are likely to intensify as the rental sector digitalizes lease management and as housing demand pressures mount, particularly in metropolitan regions. Ongoing legislative reviews are expected to address emerging issues such as short-term rentals and energy efficiency obligations, which may further impact landlord and tenant responsibilities in the coming years (Ministry of the Environment, Finland).

Key Market Statistics: Vacancy Rates, Yields, and Demographics

The Finnish rental market in 2025 is shaped by evolving demographic trends, regional variances in vacancy rates, and persistent shifts in investment yields. These factors have direct implications for both landlords and tenants, as well as for market stability and policy direction.

• Vacancy Rates: As of early 2025, vacancy rates in Finland’s largest cities remain low, particularly in the Helsinki metropolitan area, where strong demand for rental housing continues. In contrast, some smaller municipalities and regions with declining populations report higher vacancy rates, reflecting urbanization trends. According to the Statistics Finland, the average national vacancy rate for rental apartments has hovered around 4-5%, with higher rates (6-8%) in certain eastern and northern regions. In Helsinki, Espoo, and Tampere, vacancy rates are typically under 3%, indicating a tight rental market.
• Rental Yields: Gross rental yields in Finland vary significantly by location. In major urban centers, yields average between 3.5% and 4.5%, reflecting high property values and consistent tenant demand. Secondary cities and university towns, such as Turku and Jyväskylä, offer marginally higher yields, often in the 4.5% to 5.5% range, but may entail higher vacancy risk. The Central Federation of Finnish Real Estate Agencies regularly reports that investors remain focused on new-build and energy-efficient properties, which tend to attract higher-quality tenants and stable returns.
• Demographics: Demographic changes play a central role in shaping rental demand. Finland’s population is aging, yet urban areas continue to attract young professionals, students, and immigrants. The Finnish Immigration Service notes that net immigration contributes positively to population growth in the Helsinki, Tampere, and Turku regions, reinforcing rental demand. Simultaneously, the average household size is decreasing, leading to heightened demand for smaller apartments and studio units.
• Outlook: Over the next few years, market analysts at the Bank of Finland expect stable or slightly rising rental prices in growth centers, driven by continued urban migration and moderate economic recovery. Vacancy rates in rural areas may rise further, while yields in prime locations are projected to remain steady or edge downward due to competitive investor activity and high property prices.

In summary, the Finnish rental market in 2025 is characterized by low urban vacancy rates, steady yields, and demographic shifts favoring growth centers, with ongoing challenges for peripheral regions facing population decline.

Major Drivers: Immigration, Student Housing, and Economic Growth

The rental market in Finland is shaped by several major drivers, notably immigration, student housing demand, and broader economic growth. Each of these factors exerts a tangible influence on market dynamics, regulatory responses, and the outlook for the coming years.

• Immigration: Net migration to Finland has increased over recent years, with statistics showing more than 50,000 new arrivals in 2023—a record figure largely driven by international protection, employment opportunities, family reunification, and studies. This influx puts pressure on urban rental markets, particularly in the Helsinki metropolitan area, as new residents seek accommodation rapidly. The government has signaled ongoing reforms to streamline residence permit processes and integration, further supporting population growth through migration in 2025 and beyond (Statistics Finland; Finnish Immigration Service).
• Student Housing: The higher education sector continues to attract both domestic and international students, intensifying demand for affordable rentals. In 2023, Finnish universities and universities of applied sciences reported nearly 300,000 enrolled students. Student housing providers, such as HOAS (the Helsinki Student Housing Foundation), report persistently high application rates and occupancy, with supply lagging behind demand in major student cities. Legislative measures such as rent control for state-subsidized student housing and municipal initiatives to expand student accommodation are ongoing (Ministry of Education and Culture; Helsingin seudun opiskelija-asuntosäätiö (HOAS)).
• Economic Growth: While Finland experienced economic headwinds in 2023–2024, cautious recovery is forecast for 2025, with GDP growth expected to rebound modestly. Employment rates, a key factor for rental demand, remain stable in urban centers. The construction of new rental apartments has slowed due to higher interest rates and building costs, potentially limiting future supply and supporting rental price growth. Government policy continues to encourage housing construction, but the pace of new completions is expected to remain below earlier peaks (Ministry of Finance; Housing Finance and Development Centre of Finland (ARA)).

Outlook for the rental market in 2025 and subsequent years points toward sustained demand, especially in growth centers. Regulatory compliance remains critical: Finnish tenancy law (Act on Residential Leases, 481/1995) sets clear rights and obligations for landlords and tenants, including security of tenure and fair rent increases (Finlex Data Bank). Market balance will hinge on how effectively supply responds to ongoing demographic and economic shifts.

Future Outlook: Projections for 2025–2029

The rental market in Finland is poised for significant changes between 2025 and 2029, shaped by evolving demographic trends, legislative adjustments, and market dynamics. As urbanization continues, demand for rental housing in metropolitan areas such as Helsinki, Espoo, and Tampere is expected to remain robust, even as the national population growth moderates. Migration from rural to urban centers and an increasing share of single-person households are likely to sustain pressure on rental markets in city areas.

Key legislative frameworks governing the rental market, notably the Act on Residential Leases, remain stable, ensuring strong tenant protections and clearly defined landlord obligations. Finland’s tenancy laws provide for fixed-term and open-ended contracts, with rent increases typically regulated by contract terms or indexation clauses. The government has shown no intention of introducing national rent controls, instead relying on existing legal instruments and market mechanisms to balance interests (Finnish Government).

Compliance and transparency are set to increase as digitalization spreads through the sector. Electronic tenancy agreements and digital property management tools are becoming standard, streamlining processes and reducing administrative disputes. The Finnish Tax Administration continues to ensure that rental income is appropriately declared, with electronic reporting systems making oversight more effective.

Statistically, the share of households living in rented dwellings has stabilized at around 32%, with the Helsinki region showing the highest concentration of renters (Statistics Finland). Average rents have been rising moderately, with recent figures indicating annual increases of 1–2% in major cities, a trend likely to persist due to limited additions to the residential housing stock and construction delays caused by economic uncertainty.

Looking ahead to 2025–2029, the outlook for the Finnish rental market is cautiously optimistic. While economic volatility and inflation may challenge affordability for some tenants, demand fundamentals in urban centers remain strong. Policy focus on expanding affordable housing and supporting new construction, especially through municipal housing companies (The Housing Finance and Development Centre of Finland (ARA)), may gradually ease supply constraints. Overall, the sector is expected to maintain stability, with incremental changes rather than disruptive shifts characterizing the near future.

Official Resources & Guidance for Stakeholders (e.g., Kela.fi, vero.fi, ym.fi)

The rental market in Finland is shaped by a comprehensive legal framework and is supported by various official organizations that provide guidance and resources for both landlords and tenants. The following overview highlights key authorities, their roles, and the official resources available in 2025 and beyond.

• Ministry of the Environment (Ympäristöministeriö):
  The Ministry is responsible for housing policy, including regulation and development of rental housing. It provides official information on tenancy laws, housing subsidies, and reforms affecting the rental sector. Stakeholders can access guidelines on rental agreements, tenant rights, and housing market statistics directly from the Ministry of the Environment.
• The Social Insurance Institution of Finland (Kela):
  Kela administers housing benefits, which play a significant role in the rental market by supporting low-income tenants. Up-to-date eligibility criteria, application procedures, and benefit calculators are available for both tenants and property owners on the Kela website.
• Tax Administration (Vero):
  Rental income is subject to taxation in Finland. The Finnish Tax Administration offers detailed instructions for landlords about declaring rental income, deductible expenses, and VAT obligations for special cases. Landlords and tenants can refer to comprehensive tax guidance on the Tax Administration portal.
• Consumer Advisory Services (Kilpailu- ja kuluttajavirasto):
  The Finnish Competition and Consumer Authority provides legal advice regarding tenant and landlord rights, dispute resolution, and contract templates. These resources are crucial for ensuring compliance and preventing conflicts. Access is available through the Finnish Competition and Consumer Authority.
• Digital and Population Data Services Agency:
  This agency maintains the Population Information System, which is relevant for tenancy registration and address changes. Guidance for official registration when moving into or out of a rental property is provided by the Digital and Population Data Services Agency.

Stakeholders are advised to consult these authoritative resources regularly to stay informed about legal changes, compliance obligations, and current support measures affecting the Finnish rental market. Official guidance ensures transparency and helps both landlords and tenants navigate an evolving regulatory landscape as Finland continues to adapt its housing policies through 2025 and beyond.

Sources & References

• Statistics Finland
• Finnish Landlord Association
• City of Helsinki
• Statistics Finland
• Housing Finance and Development Centre of Finland (ARA)
• Finnish Competition and Consumer Authority
• Finnish Tax Administration
• Social Insurance Institution of Finland (Kela)
• ARA
• Consumer Association of Finland
• Bank of Finland
• Helsingin seudun opiskelija-asuntosäätiö (HOAS)