Business Round-Up: Apartment prices no longer on the rise in Denmark – The Post

Business Round-Up: Apartment prices no longer on the rise in Denmark

Meanwhile, Mastercard buys part of Nets, Just Eat gets caught in a scandal, and a Danish company’s desire to create sustainable energy faces a two-year delay

Time to buy one? (photo: Pixabay)
August 9th, 2019 9:09 am| by Arushi Rajput

For the first time in seven years, the constant increase in apartment prices has come to a halt, as indicated by a statement from the Boligsiden website that collects data from the country’s estate agents. 

Then Vs Now
Previously, prices had increased by 8 to 10 percent annually. Since last summer, the scenario has changed, as the national average of 27,700 kroner per square metre has stayed the same over the last year. 

Roughly speaking, a 100 square metre apartment cost 2.77 million in 2018, and the price is unchanged today. 

The declining demand
The stagnant nature of apartment prices is primarily due to decreasing demand in Copenhagen and Aarhus, which account for nearly 50 percent of the total apartments in Denmark. 

There are two reasons for the slowdown in demand: the high apartment prices (which increase year after year) and the 2018 implementation of stricter home rules.

The rules state that the high-debt households will not be able to get mortgages with a short maturity and repayment period. Additionally, the consumer has to pay 5 percent of the purchase price himself despite taking a home loan. 

The public had concerns about the large increases, and therefore the home rules have tightened. This means there are fewer people who can now afford to buy apartments, and that has meant that the sky-high prices have stopped,” explained Birgit Daetz, a home economist at Boligsiden, to TV2

Looking outside the big cities
Home prices – villas and townhouses – have risen in Vejle, Odense and a few municipalities in the capital in the past year. 

“The high prices mean that more people are now looking outside the big cities. They can get more with the same amount of money,” explained Birgit Daetz.

For the same reason, the prices in Copenhagen and Aarhus have fallen by 1 to 2 percent.

Mastercard shells out 21.3 billion kroner for a part of Nets
Mastercard has bought Nets’ account-to-account services in Denmark and Norway for a price believed to be 21.3 billion kroner. The buyout happened due to Nets’ desire to take its service to an international audience, which it believes could be only possible via a global leader in the payment industry. “This will strengthen MasterCard’s already solid position in the market,” said Bo Nilsson, the CEO of Nets. However, the deal is yet to be approved by the European competition authority as well as the Danish and Norwegian financial regulators. 

Just Eat accused of tax evasion by Danish state
Denmark has made a claim for over a billion Danish kroner in unpaid taxes from the takeaway giant Just Eat, citing a plausible case of tax evasion. The state believes that the company did not pay its full tax amount before moving its headquarters from Copenhagen to London to 2012. “Just Eat is a company that always intends to pay taxes in the countries where the company operates. We do not agree on the £126 million figure, but we want to collaborate, and see where it ends,” said James Baker, a spokesperson for Just Eat London.

Danish energy company’s 600 billion kroner plant amidst a 2 year delay
The Danish energy company Ørsted’s plant in Northwich in the UK has been delayed for two years due to problems with a new waste management technology. Renescience, which has been in development for 10 years, can convert organic waste into sustainable energy and is a great contributor to society. The challenge is to get the plant up and running on a large scale, stated Maz Plechinger, the editor at Energiwatch. Operations should have been ready in May 2017, but since then the project has faced several technical issues and is not expected to open in August.