29.11.2025 23:00
With the collapse of the housing market in Finland, at least 10 real estate funds have imposed restrictions on withdrawal transactions; over 56,000 investors are unable to access their savings due to the funds experiencing cash flow issues and postponing sales.
In Finland, a country in Northern Europe, the economy's slide into technical recession in 2023 and the lack of signs of recovery throughout 2024 have revealed significant vulnerabilities in the country's real estate-focused investment funds.
LIMITATIONS ON WITHDRAWAL REQUESTS FROM REAL ESTATE FUNDS
The depreciation of housing prices and stagnation in the market have weakened the payment capacity of funds that have been promoted as low-risk options for years. At least 10 real estate funds operating in the country have imposed restrictions on investors' withdrawal requests. This situation has led to thousands of people being unable to access their savings.
CASH UNAVAILABLE TO MEET PAYMENTS
The process erupted in September 2023 in a housing fund managed by Alandsbanken, one of Finland's century-old banks. Due to rising interest rates and a collapsing housing market, the fund was unable to find the cash needed to meet the requested payments and temporarily halted withdrawal transactions.
The fund, managing a portfolio exceeding 700 million Euros, decided not to act hastily to avoid selling properties at low prices. This resulted in delays in payments to investors.
NUMBER OF VICTIMS EXCEEDS 56 THOUSAND
Following Alandsbanken, one of the largest financial institutions in the country, OP Bank, also took a similar step towards the end of 2024. The bank's restriction decision affected approximately 56,000 investors.
CONTINUING TO COLLECT FEES
Fund managements argue that they are waiting for the market to recover, claiming that hastily selling properties would cause greater losses. However, as investors' wait extends during this process, funds continue to collect management fees. Financial regulatory authorities in Finland state that the current regulations have narrowed their intervention areas, indicating that they are only conducting oversight.