Housing starts hit record low

Plummeting housing prices lead to fewer new houses being built than any time since records were kept

Residential home construction in Denmark is at a level not seen since records were first kept in 1949.

Construction is slated to begin on just 9,500 new homes this year, according to figures from construction industry trade group Dansk Byggeri. In 2006, nearly 35,000 new homes were built.

“Even during the crisis in the 1930s more homes were being built than this year,” Dansk Byggeri senior economist Finn Bo Frandsen said. “Even though there were two million fewer people in the country, on average about 18,000 new homes were started every year.”

The decline in new construction is connected with the decline in housing prices, which have been steadily falling since they peaked in December 2006.

According to Dansk Byggeri, the decline accelerated in September 2008, as the recession took hold. There was a small tick upward around 2009, but that trend has now reversed.

The historically low construction level means not enough new homes are being built to meet demand. In Copenhagen alone, 1,000 new residents are looking for a place to live.

“The total number of new homes being built now is what should be being built in Copenhagen alone,” Frandsen told Politiken “New homes are needed in other cities where universities are bringing in more residents.”

Although residential building is down, figures for public sector construction and maintenance work are improving.