At the start of September, Finland had 5,000 unsold new-build apartments, according to the Ministry of Finance.
Property investors' lack of enthusiasm is especially evident in the capital region, where the number of unsold new apartments has risen sharply. A recent report from the Finance Ministry indicates that the number of unsold new flats is now unusually high, resulting in longer sales times for these properties.
Finland's largest housing developer, YIT, has a total of 1,212 unsold new apartments, with 867 located in Finland, according to the latest available data.
"New apartments have typically been purchased by real estate investors, and when interest rates rose, investors stopped buying them. As a result, the drop in demand has been steeper for new apartments compared to older ones, Veera Holappa, a senior economist at Pellervo Economic Research (PTT), told Yle.
Promotional campaigns fall flat
Despite sitting on a record number of unsold flats, construction companies have so far been reluctant to lower their prices.
"Construction companies hesitate to lower prices because it could impact their balance sheet values and access to new loans. They want to sell their existing inventory to be able to start new projects," Holappa explained.
Instead, construction companies have offered various perks, such as electric cars or free moving services, to draw buyers.
These campaigns have, however, done little to boost sales.
Giving potential buyers a year off maintenance fees could help sweeten the deal, according to Janne Paasimies, managing director of realtor Sp-Koti.
Construction company SRV is currently waiving maintenance fees for a year to buyers of new-build apartments.
Lately, housing developers have also resorted to lowering prices.
Pohjola Rakennus, for example, is offering a ten percent discount on the debt-free purchase price of certain new construction apartments, along with a year of maintenance fees included in the deal.
"Right now it's a buyer's market for new construction, so customers should definitely be asking for price reductions, Paasimies said.
Ultimately, high price levels are impeding the sale of new apartments in an environment where the rising cost of housing is outstripping advances in earnings. This means prospective buyers are now scrutinising their living expenses more carefully and opting for older apartments, which may be more budget-friendly.