Should you invest in older or newer property?

In February 2026, Kojamo agreed a deal with Varma under which its subsidiary Lumo Kodit will buy 60 residential properties with 4,761 apartments. The debt-free price was about 900 million euros, and the properties are mainly in the Helsinki metropolitan area. The company did not build. It bought what was already built.

According to Kojamo, the price corresponds to a stabilised net yield of about 4.9 per cent, that is, a yield that is only achieved once the occupancy rate rises above the current 83 per cent. The announced yield is therefore not achieved immediately; the vacant apartments must first be filled. In new developments the investor's return is even further away, because there is no income during construction, and construction costs are usually higher than the cost of older rental housing stock.

The price gap

The price gap between old and new apartments has widened in recent years because prices of old apartments have fallen more than those of new ones. According to Pellervo Economic Research (PTT), prices of new apartments have fallen by about 8 per cent from their peak and those of old apartments by as much as 16 per cent. PTT adds that the real fall in new-home prices is probably larger than the statistics show, because sales have been boosted with, for example, fixed-term periods without maintenance charges, which do not show in the recorded price.

Statistics Finland's figures show the same in Helsinki. The average price per square metre of an old apartment was 4,796 euros in the first quarter of this year. That is 16.1 per cent less than in the second quarter of 2022, when prices peaked. Across the Helsinki metropolitan area the fall is 16.0 per cent and in the country as a whole 12.1 per cent.

Construction has gone the other way. In September the building cost index was 15.9 per cent above its 2021 average, and costs rose by 3.4 per cent over the year. Old has become cheaper, and building new has become more expensive.

In October, Helsingin Sanomat reported an estimate by Mikko Kuusela, a director at JLL, that building new rental apartments will not pay at current required yields until rents rise by 20 per cent. The required yield is the return an investor expects on the capital committed. If it is not high enough, the project is not started.

Construction has stalled

The price gap shows in construction. In 2021, construction started on 47,602 apartments in residential buildings across Finland, and in 2025 on only 17,802. The number fell by 63 per cent. In January–August this year, starts were a further 17 per cent lower than a year earlier.

Eemeli Karlsson, an economist at the Finnish Landlord Association, does not expect a quick turnaround: "New construction may well stay fairly modest until the turn of the decade. The supply will take a long time to be absorbed." According to his modelling, the oversupply will fall to the 2015 level in 2029 at the earliest, even if no new housing projects were approved at all.

Rent forecasts differ. According to Kuusela, the Helsinki rental market will turn in landlords' favour within the next two years, and rents will rise by as much as 5 per cent a year. The Landlord Association's modelling is more cautious. Which one is right remains open.

The costs of an older property do not end with the purchase price

The purchase price does not show the full cost of an older property. Apartment building housing companies spent 2.2 billion euros on renovations last year, most of it on building services. Renovations come to every building in time, and the owner pays for them.

Financing is another difference. According to research reported by Aalto University, a property's energy class already affects mortgage decisions: "In practice, a property with a very poor energy class may not get a loan at all, because banks consider it too risky." According to the research, the financial system steered by EU regulation encourages banks to finance new developments rather than energy renovations. The low price of an older property can therefore mean more expensive or harder-to-obtain financing.

In offices, the risk must show in the price

In commercial premises, many see the older stock as a risk that must be reflected in the price. At the end of September there was about 820,000 square metres of vacant space in the main office areas of the Helsinki metropolitan area, and the vacancy rate was 18.6 per cent. In the best, Grade A offices the vacancy rate was about 8.9 per cent, and they make up about 22 per cent of the office stock surveyed. Calculated from these figures, about nine out of ten vacant square metres are outside the best offices.

Newsec's September review puts it plainly: the vacancy problem is not an office problem but a problem of old offices. According to Rakli's spring review, demand for the best properties is expected to remain strong, but leasing is challenging in the weaker office stock. According to Catella, the prime yield for offices, that is, the required yield for the best properties, rose by 0.2 percentage points to 5.7 per cent last year.

Higher risk requires a higher return. If an older office has twice the vacancy of the best offices, that can be acceptable when the purchase price compensates for the empty square metres and the extra work of leasing. The key figure is the initial yield, that is, the rental yield relative to the purchase price at the time of purchase. If it is, for example, 12 per cent instead of 6 per cent, higher vacancy can become a return opportunity worth seizing. The average market vacancy rate alone therefore does not determine what a sensible investment is.

Should you invest in older or newer property?

There is no clear right or wrong answer to the question. At the moment, however, the figures favour investing in older properties in the housing market. In Helsinki, an old apartment costs about one sixth less than at the price peak in 2022. According to JLL's estimate, building new pays only with rents 20 per cent higher than today, and starts have fallen to less than two fifths of the 2021 level. The buyer of an older property, however, pays for renovations themselves, and a poor energy class can make financing harder.

In offices and other commercial premises the answer is more complex. New construction projects are often based on the property being fully let on long leases before the decision to build. Older properties therefore naturally have higher vacancy, on average more than twice as high. On the other hand, there are few buyers in the market, so prices can be quite flexible. When buying older commercial premises, two things are decisive: does the price compensate for the risk, and can the owner fill the vacant space?

Sources

1. Kojamo Oyj, insider information, 10 February 2026: Kojamo has agreed on the acquisition of a residential portfolio
2. Pellervo Economic Research, PTT forecasts: Housing market forecast 2026
3. Statistics Finland: Prices of dwellings in housing companies, old dwellings (table 13mv), first quarter of 2026
4. Statistics Finland: Building cost index 2021=100 (table 13g8), September 2026; release 15 October 2026
5. Helsingin Sanomat, 15 October 2026: Forecast: the tenant-friendly market will end as early as next year
6. Statistics Finland: Building and dwelling production, dwelling starts in residential buildings (table 156f), August 2026
7. Verkkouutiset, 17 May 2026: A historic situation in the Helsinki rental market – apartments are not filling up
8. Statistics Finland, 16 June 2026: Renovation building 2025
9. Aalto University, 30 September 2026: Energy efficiency already affects your mortgage – next, attention turns to climate risks
10. Rakli and Helsinki Research Forum, release 1 October 2026: Office vacancy in the Helsinki metropolitan area continues to grow
11. Newsec, 30 September 2026: Newsec Property Outlook: Office vacancy is becoming a measure of quality, not weakness
12. Rakli: Commercial property market review, spring 2026 (20 May 2026)
13. Catella: Market review Finland, spring 2026