Finland

In 2024, the home ownership rate in Finland declined to 68.1%, meaning about 31.9% of people rent their home. Median purchase prices for apartments across Finland are around €2,609 per square meter for existing units and €4,954 per square meter for new apartments. Median rent nationally is estimated at about €15 per square meter per month, although this can be higher in Helsinki and other cities.

Publicly owned and social housing play a significant role, especially in urban areas. In Helsinki, the municipal government owns about 50,000 rental units, and roughly 30% of rental apartments nationwide are owned by municipalities or public enterprises. Social housing in Finland typically refers to ARA (Housing Finance and Development Centre of Finland) regulated units, which are publicly subsidized and allocated based on need, with cost-based rents. Public housing may refer more broadly to any housing owned by municipal entities, and can include both regulated social housing (ARA) and units rented on more commercial terms. In cities like Helsinki, these two categories often overlap but are not always identical: not all public rental housing is subject to the same social criteria or rent restrictions as ARA social housing.

Finland’s social housing is a minority in the overall housing stock but is crucial for vulnerable groups and for maintaining social mix in neighborhoods. Recent policy changes and funding cuts may challenge its scope in the coming years.

Finland is experiencing a multi-dimensional housing crisis marked by low transaction volumes, a slowdown in new residential construction, and an observable gap between the affordability of new and older homes. Residential transactions in 2024 were more than 22% below the five-year average, and new construction hit its lowest point since the 1990s, with most market activity focused on second-hand dwellings and publicly supported housing. Rental inflation, which surged in previous years, slowed to 2.3% annually in 2024, but rents in state-subsidized housing rose much faster, particularly in larger cities.

Segregation between public, social, and market-rate rental sectors persists, with nearly 29% of the population in rental housing, including almost 9% in subsidized units. Groups most affected by the crisis are low-income households, young adults, single parents, immigrants, and those in major urban centers, where demand far outpaces supply. Vulnerable groups, such as the long-term homeless and social benefit recipients, are especially impacted by limited access to affordable housing and rent increases outstripping incomes. Homeownership has declined, with elevated borrowing costs and tighter credit conditions making it harder for first-time buyers and low-income families to enter the market. Recent economic instability and policy shifts have further strained access and affordability, amplifying social inequalities.

The Finnish government’s current approach to affordable and sustainable housing is shaped by a drive to reduce public expenditure and restructure support mechanisms. Major reforms take effect in January 2025, most notably the scaling back of the general housing allowance: asset tests will exclude support for higher-wealth households, and all aid for owner-occupiers will end. Cost ceilings for allowances are also being lowered in several cities to further contain spending, targeting overall savings of over €43 million a year. These measures, while addressing fiscal concerns, are expected to tighten eligibility and impact vulnerable groups.

On homelessness, Finland continues its internationally recognized Housing First policy, focusing on providing permanent homes without preconditions alongside supportive services. The government’s explicit target is to eradicate long-term homelessness by 2027, with investment of €250 million in new homes and support staff—this initiative has already dramatically reduced chronic homelessness nationally.

Sustainable housing receives policy attention through enforced energy efficiency standards for new construction, incentives for energy upgrades, and promotion of eco-friendly materials. Recent years have seen a push for accessible, age-adapted homes as the population ages. Overall, national policy in 2025 balances fiscal retrenchment in general support with targeted, program-based action for the homeless and sustainable building development.

Housing cooperatives in Finland represent a very small segment of the housing market. Over the last century, while more than 70,000 housing companies (asunto-osakeyhtiö) have been established nationwide, there are only about 200 housing cooperatives (asunto-osuuskunta). The cooperative model has struggled to expand due to limited access to financing: lenders have historically preferred company-form housing associations for legal and financial reasons, making cooperatives less attractive for new projects.

In recent years, interest in social and community-oriented housing models prompted a small government-supported pilot program. Between 2020 and 2022, four new cooperative housing projects were completed, each with only a handful to a few dozen dwellings. However, in 2022, state funding for new cooperative housing was discontinued due to the low volume of successful projects and ongoing financing challenges. As a result, cooperative housing remains a niche solution, with no significant share of Finland’s total housing units and no recent indication of notable sector growth.

Currently, there are no large-scale state policies promoting cooperative housing, and national housing policy focuses on other aspects—such as affordable rental provision, energy efficiency, and solutions for homelessness—rather than cooperatives. Interest may rise in future if financing or legal frameworks evolve to support cooperative models.