Marie Bucht, head of advice at Newsec, says, "As a result of an improving financial market, rising transaction volumes and stabilising market rents, Newsec now expects yields to have reached their highest levels, and in 2010 and 2011 we will see the first recoveries in the northern European property market." Swedish residential property is one segment with exceptional potentialities during coming years, and the segment is heading towards a smooth recovery because of its stable cash-flows. "The potentialities of residential properties are not unrecognized by investors; in fact, Newsec currently more than 100 prospective investors in residential properties in regional Swedish cities," says Bucht.

In Stockholm rents fell by 5%-10% in most submarkets outside the CBD and by 15% in the CBD during 2009. Market rents are expected to fall a little further but most of the slide has occurred. In Helsinki the smallest falls have so far been in the CBD and other prime office submarkets, while in Copenhagen the effects on rents are moderated by the drastic slowdown in construction. However, in both cities market rents are expected to keep falling in 2010 and stabilize in 2011. The pattern for office rents in Oslo CBD is different. There, rents almost doubled between 2005 and 2008 and then slid significantly in 2009. But they have now started to stabilize and in 2011 a recovery is expected.

Looking at the Baltics, rental discounts in the Estonian capital of Tallinn of 10%-20% when renewing leases are common but the situation stabilised somewhat by end-2009. In the Latvian capital Riga the rental decline peaked in mid 2009, but is forecast for continuing falls in 2010. In Vilnius, Lithuania, the overall rent level has decreased by 30-35% compared to the peak in 2007/2008. The largest drop occurred in late 2008 and early 2009, and Vilnius office rents are expected to remain stable during 2010.