Apartment prices in Copenhagen are closing in on the pre-global financial crisis record highs in 2006 as they shot up by 5.7 percent between March and April, according to figures from estate agents Home.
The past year has seen price hikes of about 16 percent, partially due to increased sales of newly-built apartment buildings, which account for 30 percent of the total apartment sales in the capital. The development has economists concerned.
“The situation is beginning to be a concern,” Steen Bocian, the head economist at Danske Bank, told TV2 Finans. “We can’t conclude this is a housing bubble yet because there is so much going on and many people are moving to the cities.”
“But having said that, this hasty growth should be worrying if you are a buyer scouring the market now.”
Bocian went on to contend that the recent rise in interest rates could have a positive effect on the Copenhagen housing market.
In related news, figures from Home this month also revealed that single people can afford to live in a house in two out of every three municipalities in the country.
“A 90 sqm home is an option for single people with an annual income of 400,000 kroner in two-thirds of all municipalities,” Lars Olsen, a Danske Bank economist, told Home. “The big exception is the capital region and Aarhus.”
A 90 sqm house in Frederiksberg requires an annual income of 810,000 kroner a year – a considerable difference compared to the 215,000 kroner needed for the same sized house in Lolland.