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PROPERTY

What has happened to Denmark’s housing market so far in 2024?

A drop in the price of apartments in Copenhagen and stable house price trends were among the features of the Danish property market during the early months of 2024.

Published: 11 April 2024 14:52 CEST
What has happened to Denmark’s housing market so far in 2024?
How have house prices in Denmark fluctuated so far this year? Photo: Ida Marie Odgaard/Ritzau Scanpix

House prices for both detached (villaer) and semi-detached or terraced (rækkehus) housing fell by 0.2 percent in terms of the price per square metre in the first quarter of this year, new data from specialist media Boligsiden show.

Effectively, this means house prices were unchanged in the first part of this year compared to the end of 2023, the property media said in a press release.

Stable house prices makes a substantial – if lower than forecast – drop in the cost of apartments in Copenhagen the key takeaway from property market data from the first quarter of this year.

Privately-owned apartments in the Greater Copenhagen were 2.3 percent cheaper in the first three months of this year compared to the preceding quarter.

“In the past, we have seen a price increase from the fourth quarter of the year gone by to the first quarter of the new year. That is explained by the housing market often taking a break during the winter months and activity then increasing when spring arrives,” Boligsiden’s economist and head of communications Birgit Daetz said in the press release.

“But that trend does not apply in the same way this year,” she noted.

READ ALSO: Denmark has highest number of houses put on market since 2008

It is in particular the introduction of a new property tax on January 1st 2024 that has disrupted trends usually seen on the market, she said.

“The new property tax rules took effect at the new year and that change has given some skews on the housing market, especially in areas of the country where property taxes have now increased,” she explained.

A high activity at the end of 2023 in affected areas – notably Copenhagen’s apartment market – was followed by a quiet spell after the new rules kicked in for this reason, she said.

Because of the nature of the new rules, apartments in cities are most likely to see higher property taxes for new owner from 2024 onwards, whereas other types and locations are less likely to be affected.

READ ALSO: EXPLAINED: Denmark’s new property tax rules from 2024

“Having said that, the property tax changes have also given either lower or unchanged taxes in large parts of the country and in several of those places the house prices have gone up from the fourth quarter last year to the first quarter this year,” she said.

Breaking the trends up by region, Greater Copenhagen and Central Jutland – including second city Aarhus – saw house prices fall by 0.6 percent and 1.6 percent respectively.

In North Jutland, Zealand and South Denmark, there were increases of 4.8 percent, 2 percent and 0.6 percent respectively.

Although the price of apartments in Copenhagen fell by 1.7 percent compared to a 1.4 percent national average, the figure is less severe than some had feared, according to an analyst who spoke to news wire Ritzau.

That is despite the decline meaning an 80-square-metre apartment in the capital is now theoretically worth 72,000 kroner less than it was at the end of last year.

READ ALSO: What prospective homebuyers in Denmark can expect in 2024

“There hasn’t been a [price] bloodbath, and that is connected to high employment, inflation falling away and the fact that many Danes are seeing the highest wage increases for decades,” said Mire Lie Nielsen, economist with credit union Nykredit.

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PROPERTY

Busiest August for housing in Denmark in three years as sales bounce back

The number of properties a month sold in Denmark continued to bounce back in August, according to new data, with a surge in summer house sales pushing the market to the busiest August in three years.

Published: 19 September 2024 10:42 CEST
Busiest August for housing in Denmark in three years as sales bounce back

A total of 7,248 residential properties were sold this August, according to the latest statistics from the Boligsiden housing website, 1.2 percent up on July and 1.4 percent up on August 2023, with sales being driven by the buoyant market for summer houses and owner-occupied apartments. 

“We are now back at a level similar to what we had a few years back, before interest rates started to rise,” Mira Lie Nielsen, an economist at Nykredit, told the Ritzau newswire. “There have been high wage increases, interest rates are on the way down, and then there is a low supply of apartments, which means that both the prices, but also the transactions, are climbing nicely again.”

Below you can see a diagram by Boligsiden showing the number of properties sold in August over each of the past six years, showing the peak during the Covid-19 pandemic in 2020.

Source: Boligsiden

Birgit Daetz, housing economist and communications director at Boligsiden, said that the increase in sales between July in August, although smaller than usual, did not mean the market was slowing down. 

“This is mainly due to the fact that an extraordinary number of homes were sold in July this year, which is why the increase in August sales seems a little smaller. In other words, this is a good sales result for August this year, which is close to the average sales for the same month in the years before corona,” she said in a statement.

READ ALSO:

The number of detached and semi-detached houses sold fell 1.8 percent from July to August, with falls in Southern Denmark and Zealand only partly compensated by a rise in the number of house sales in Central Jutland, Greater Copenhagen and North Jutland. 

“It is not unusual that the housing market is slightly more affected by the summer holiday break compared to the other housing types, because it is often families with children who buy a house, where the majority of them are on holiday at the same time as the school summer holidays, which continue into August,”  Daetz explained.

“However, despite the summer holidays, this year’s August sales of houses exceed the average sales for the month in the years before corona in the vast majority of the country, which shows that house sales are still at a good level.”

The number of summer houses sold soared by 13.6 percent between July and August, with owners presumably waiting until the end of their summer holidays before finalising sales. 

Sales of owner-occupied apartments were also strong, rising 5.8 percent between July and August, and as much as 9.5 percent in Copenhagen, something Daetz said continued an established trend. 

“For a relatively long time, we have seen growth in the market for owner-occupied flats, with increasing commercial activity and higher sales prices. It is a surprising development, which has occurred despite the fact that property taxes have in many cases increased for owner-occupied flats – especially in the capital,” Daetz said.

Even after this year’s rebound, however, the Danish housing market is still 20 percent slower than it was in the years running of to the Covid-19 pandemic and the following period of high inflation. 

“Even though the apartment market seems to be hot at the moment, sales are still lagging behind compared to the average August sales in the years before corona by 20 percent,” Daetz said. 

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