Rental prices explode while housing sales fall

It’s cheaper to buy than rent as the housing market continues to be affected by economic down-turn

March 15th, 2012 10:41 am| by admin
facebooktwittergoogle_pluspinterestmail

As house prices continue to plummet across Denmark, the cost of rental properties is going up.

A  recent survey conducted by Boligportal.dk for  Politiken newspaper revealed that the rent of an average three-bedroom apartment has increased by 15 percent in Copenhagen and 20 percent in Aarhus since 2007. During the same period, the price of buying a housing property has decreased by 22 percent – the biggest dip in the last 70 years.

According to the data, an average two-bedroom rented apartment today costs 7,288 kroner a month in Copenhagen compared to 6,400 kroner in 2007, while the present cost of a four-room apartment is 14,049 kroner, whereas it was only 11,764 kroner in 2007.

The trend isn’t only affecting the capital region. Aarhus’s housing market has seen the cost of a three-bedroom rented apartment rise from 6,983 kroner to 8,316 kroner a month since 2007.

According to Henrik Løvig, the administration director of  Boligportal.dk, it’s simply a matter of supply and demand.

“When consumers are unwilling to buy, there is a rise in demand for rental apartments and this has been reflected in the analysis,” Løvig told Politiken. “Moreover, we believe that the population growth in major cities has boosted the demand for rental housing.”

Jesper Larsen, the chief economist at the national tenant association Lejernes LO, told Politiken that the rise in the rental housing is a big problem.

“Several tenants are facing acute housing shortage,” Larsen said. “They take an expensive residence in the thought that they will only be there for a short period until they find something that suits their budget, but affordable solutions are tougher and tougher to find.”

The increase in rental prices came as a surprise to the Socialdemokraterne’s housing spokesperson, Jan Johansen.

“Holy crap, that doesn’t sound very good,” he told Politiken in response to the increases. “This development will clearly mean that fewer people can afford a property in the capital region. It’s the school teacher and the policeman who are being held out [of the market].”

Johansen, however, wasn’t able to offer any suggestions for changing the situation.

“I must admit that I don’t have anything concrete to offer that can solve this problem,” he said. “But a solution needs to be found. This development cannot continue.”

The wine and the equally welcoming staff (photo: Daniel Deleuran)
Intimate setting and infinite wine selection one of several magic combos
Visiting the Facebook page of Deligreco, a Frederiksberg-based Greek restau...
There may be a few detours ahead, but the journey continues (photo: iStock)
Startup Community: Why the ecosystem should be seen as a living organism
Stop me if you’ve heard the term ‘startup ecosystem’ or ‘entreprene...
In 2015, Danish policemen put in over 950,000 hours of overtime (photo: iStock)
Danish police overworked due to increased focus on terrorism
Danish police are overworked and more officers are taking long-term sick l...
De Saint Phalle may be dead, but her vision of femininity lives on in her art. (Photo: CCO)
Mid-February Art: A truly original vision of femininity
Niki de Saint Phalle Feb 13-June 12, open Tue-Sun 10:00-21:00; Arken, Skov...
Two men were killed and five were injured in Copenhagen terror attacks that took place last year on February 14 and 15 (photo: iStock)
Copenhagen remembers terror attacks
Copenhageners are today commemorating the tragic deaths of Finn Nørgaard ...
Uber drivers are private people who provide carpooling services (photo: iStock)
Taxi drivers in Copenhagen demonstrated against Uber
Taxi drivers in Copenhagen demonstrated yesterday against the ride-hailing ...