An economic slump with falling interest rates has hit the Danish housing market. The situation has been blamed on the escalating US-China trade war and the economic uncertainty it brought along.
To the homeowner’s advantage
Credit institutions Realkredit Danmark, Totalkredit, Nordea Kredit and Jyske Bank are offering fixed-interest, 30-year mortgage loans at an all-time low interest rate of 0.5 percent.
“We have the lowest mortgage rates ever seen in Denmark. It is a historic low,” said Christain Hilligsøe Heinig, the chief economist at Realkredit Danmark.
The conversion wave
Many homeowners have doubts about whether to take out and secure the record low interest rates on their home loan – or whether the high cost of converting still means sticking to the loan you are in, states the Consumer Council.
This has been referred to as a historically large conversion wave.
Banks to profit
Banks are set to make money from the mortgage loan restructuring.
“We are in the process of a huge conversion wave, and the banks are of course also very interested in talking about that. Because they make good money every time a new loan is taken up,” explained Morten Bruun Pedersen, a senior economist at the Consumer Council, to TV2.
Jyske Bank ready with negative interest loans
In light of the wave, Jyske Bank has introduced a ten-year, fixed-rate loan with an interest rate of minus 0.5 percent.
“It’s another chapter in the history of the mortgage. A few months ago, we would have said that this would not be possible, but we have been surprised time and time again, and this opens up a new opportunity for homeowners,” explained Mikkel Høegh, a housing economist at Jyske Bank, to TV2.
However, most Danes will find the ten-year format expensive as the monthly payment becomes much higher than it is on 30-year loans. “It is not a loan aimed at people who are going out and buying new housing, but more towards people who want to improve the housing,” added Høegh.
Employees on continuing education courses in decline
Only 200,000 people were enrolled on AMU continuing education courses this year, which is a decrease of 50 percent on 2009, when 457,000 took courses. The Education Ministry figures reveal that it is particularly unskilled employees who are saying no. “We would like to see more unskilled and skilled people taking continuing education. And if they don’t, then there is something that needs adjusting in the system,” said Søren Heisel, the federal secretary at 3F.
Insurance company fined for calling protected numbers
The insurance company Vendsyssel was issued a fine of 50,000 kroner for calling up seven people on the Robinsons List – a list that protects consumers from sales calls. Businesses must check the list before making telemarketing calls to protected numbers. “We receive many complaints about telephone sales from Robinson list subscribers who are contacted because companies ignore the list. Last year there were 440 complaints,” said the Consumer Ombudsman. Door-to-door sales are not permitted in Denmark, but telesales generally are.
Danes holding 507 billion kroner in banks at zero percent interest rate
Over half of the money sitting in Danes’ private bank accounts yields no interest. The interim statement released by Nationalbanken, the country’s central bank, suggests that out of a total sum of 921 billion kroner in Danes’ saving accounts, almost 55 percent – 507 billion kroner – yields no profit. This could be due to the difficulty in finding investment alternatives such as equities and bonds, states Nationalbanken.
Danish mink farming in serious crisis
Danish mink breeders are facing significant revenue losses – 90,000 kroner as recorded last year – according to Danmarks Statistik. Within the industry, supply has far exceeded the demand, and an increasing numbers of producers is causing the asking price to fall further. Once considered a lucrative business, the industry is now collapsing. Ann-Mona Kulsø Larsen, the owner of Nordgaarden mink farm, is making a loss of 50 kroner on every pelt she sells, reports DR. When rent, wages and feed are factored in, the cost of producing a pelt is around 280 kroner.