Should you buy now if you're looking for a property in Denmark?
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Loading... - Clara Andersen
- 15 Sep 2022
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“During Covid the housing market went up and up, people had spare time and money from the government’s corona relief packages, so the housing market went up and the interest rates fell,” Mira Lie Nielsen, housing economist at Nykredit, told The Local.
“Then the gas prices started to rise and inflation rates started to follow and the war made people uncertain. But the housing market was doing fine, until we had rising interest rates, which came around March 2022. So when we hit July, we saw the first housing price drop, for both apartments and houses, falling mostly in the Copenhagen area,” Nielsen said.
According to Nielsen, from July to August, house prices fell by 0.4 percent, apartment prices fell by 0.9 percent and Copenhagen apartment prices fell by 2 percent.
“This is a normal cycle – when interest rates rise and the number of properties for sale come down,” she said.
However there has been a “visible slowdown” in the number of properties for sale, with sales in Denmark at a level last seen in 2014 for houses and 2012 for apartments, according to Nielsen.
How much further will property prices fall?
Over the next 18 months, Nielsen expects there to be a 7-10 percent drop in house prices in Denmark, perhaps 15-16 percent in Copenhagen and a 10-12 percent drop in apartment prices with an even higher price drop for Copenhagen apartments.
“Remember property prices in Copenhagen rose 30 percent during Covid and even before then they were high, so it’s not such a shock,” Nielsen added.
To buy or not to buy?
“We always recommend you buy a property based on when your family needs it, rather than an expectation of the housing market. If you want to speculate with your money, do it on other markets rather than the housing market,” Lise Nytoft Bergmann, real estate economist and senior analyst with bank Nordea told The Local.
“We expect housing prices will go down, so if you’re worried about the value decreasing and you have a nice place to live already, then maybe it’s a good time to wait a little bit. But we don’t really recommend that you do this kind of speculation because we’ve been surprised before, such as at the beginning of the pandemic and the beginning of 2020 when many economists in Denmark believed property prices would go down and we saw opposite of that. So it can be a dangerous strategy,” Bergmann said. Read More...
