Falling house prices set to continue in 2012

But despite price decrease, more sales are forecast

Economists are predicting that house prices will drop a further four to five percent in 2012.
Danske BankÂ’s latest forecast shows prices will drop 4.7 percent, bringing the value of a 140 square meter house down from 1.66 million kroner to 1.59 million kroner.

Despite the continued price drop, 2012 is set to be a much more stable year than last year, which saw the price of an average home drop by 120,000 kroner. In ten of the 12 months of 2011, house prices fell.

According to forecasts, 2012 is set to bring better news for home sellers.

“We expect that prices will fall a little longer, but far less than in 2011, and that we will see a little more home sales in 2012,” said Mads Ellegaard, communications manager for estate agent Home.

Ellegaard said that now more than ever, people are keen to buy due to the possibility of a 3.5 percent fixed loan rate. He added that buyers see an opportunity to buy property cheaper than it should be.

Over the last five years, Danish house prices have been hit hard.  In 2006, an average home cost 2.12 million kroner. Currently an average home costs around 1.67 million kroner – a difference of 455,000 kroner.

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