Summer 2025 for real estate investors – What to expect and how to prepare?
Summer is a season when real estate investors rarely take vacations. Students are looking for apartments, internships and seasonal jobs are driving population movements, and many leases expire during the summer months. In the housing market, this is reflected in increased demand, especially for studio apartments and small two-room apartments.
However, summer 2025 will not be just another ordinary season. The government's housing subsidy cuts, which will come into effect in 2025, will change the dynamics of the rental market. At the same time, stabilizing inflation, a moderate decline in interest rates, and regional development differences will make the situation more complex than it has been in years.
Seasonal variation in summer: a familiar but ever-changing phenomenon
July–August is traditionally the busiest period in the rental market. New students are looking for apartments, especially in student cities such as Helsinki, Tampere, Turku, and Oulu. At the same time, summer jobs and internships also increase short-term demand in medium-sized cities.
This seasonal fluctuation provides apartment owners with an excellent opportunity to find tenants quickly. At the same time, it is important to remember that seasonality can lead to empty months later on if rental agreements expire outside of the season.
Housing allowance cuts: effects to become apparent in the summer
The changes to general housing allowance that came into effect in January 2025 are significant:
- The compensation percentage decreased from 80% to 70%.
- Co-payment rose from 42% to 50%
- The earned income deduction was abolished.
- Home ownership excluded from support
- Asset assessment was introduced: €10,000 in assets affects support for single persons, €50,000 prevents it altogether.
The cuts will particularly affect students and low-income earners, who are the primary target groups for many real estate investors. Demand will not disappear, but it will change: tenants' ability to pay will weaken, and cheaper apartments will become more important.
The decline in Euribor eases the situation, but does not change the demand base
Real estate investors have been helped in the early part of the year by the fact that the 12-month Euribor has started to fall. It has come down significantly from its 2023 level of over 4%:on June 10, 2025, the Euribor was already at 2.086%.
This improves the cash flow of many real estate investors, especially if the margin is moderate (e.g., 0.7–1.0%). At the same time, it lowers the threshold for new leveraged investments. However, it is important to remember that lower interest rates do not eliminate the changes in demand caused by cuts in subsidies – they only mitigate their impact from the investor's perspective.
How can real estate investors prepare for summer 2025?
1. Check that your rent is realistic
Market price is not the same thing as affordability. In the student sector and among tenants living alone, income cuts are driving the search for housing in a more affordable direction. Excessively high rents can prolong periods of vacancy.
2. Invest in tenant selection
Checking credit history and income is now more important than ever. For example, students can obtain a rental guarantee or payment commitment from their parents, which provides security for the landlord.
3. Offer flexibility in contracts
Shorter leases, options for renewal, or the possibility of reviewing the rent after a certain period of time may attract cautious tenants. Furnished options or fixed electricity costs may also set you apart from the competition.
4. Keep a close eye on the local market
The difference between Espoo, Joensuu, and Vantaa, for example, can be significant. Local rental demand, the number of students, and the employment situation affect how quickly an apartment is rented and at what price.
5. Update your financial buffer
Short periods of vacancy or tenant turnover may become more common. Sufficient cash reserves or pre-negotiated repayment holidays provide room for maneuver.
Summer 2025 is a new situation – not just a season
Summer 2025 is not a normal seasonal peak – it is part of a broader structural change whose effects will extend into the fall and beyond. Housing subsidy cuts are combined with easing interest rates and traditional migration, creating a market where pressures and opportunities meet.
Investors should now focus on four things: realism, tenant assessment, local knowledge, and flexibility. By doing so, successful real estate investors will not only survive the summer of 2025, but may also find new opportunities that are not available to others.
📚Sources
- Statistics Finland: Housing costs as a share of income increased, 2023
https://stat.fi/julkaisu/cm1he7wpz5uiw07w071aeb8t6 - Statistics Finland: 736,800 people on low incomes in 2023
https://stat.fi/julkaisu/cm49y0x3b1wpi07urvc30romg - Kela: General housing allowance to change in 2025
https://www.kela.fi/ajankohtaista/yleinen-asumistuki-pienenee-vuonna-2024-ja-sen-maksaminen-omistusasuntoihin-paattyy-vuonna-2025 - Helsingin Sanomat: Cuts to housing subsidies directly affect students and low-income earners
https://www.hs.fi/talous/art-2000011290192.html - Finnish Landlords: Landlord Barometer Autumn 2024
https://vuokranantajat.fi/palvelut/tutkimukset/vuokranantaja-barometri-syksy2024/ - Finnish Landlords: Rental Market Review 2025
https://vuokranantajat.fi/palvelut/tutkimukset/vuokramarkkinakatsaus-2025/ - Euribor-rates.eu: 12-month Euribor on June 10, 2025
https://www.euribor-rates.eu/fi/euribor-historia-12-kuukautta.asp