Cheaper to buy than to rent property in Denmark’s biggest cities

November 18th, 2014

This article is more than 9 years old.

Monthly payments smaller for renters, but buying carries risk, expert warns

According to new analysis by the bank Arbejdernes Landbank and the property listing website Boligsiden.dk, it costs less per month to own a property than to rent one in both Copenhagen and Aarhus, Politiken reports.

In Copenhagen, a new flat of 80 sqm costs an average of 9,650 kroner a month to rent, whereas the monthly outgoing for an owner is just 7,550 kroner. Likewise in Aarhus, renting is 2,100 kroner more expensive than owning. The figures are based on a fixed-interest loan at 2.5 percent without repayments.

Low interest rate the cause
“It’s interesting to see that the interest payments and taxes don’t exceed the rental expense, if you instead choose to rent,” Birgit Daetz, the communications manager at Boligsiden.dk, told Politiken.

“It’s especially the very low rents that are the reason for that.”

Other factors
But Morten Skak, an associate professor in housing economics at the University of Southern Denmark, said that the monthly payments don’t tell the complete story and that there are a lot of other costs that need to be borne when buying a property.

These include estate agent fees and land registration fees.

“As a rule of thumb you have to live in a home you have purchased for a minimum of five years before it can pay off. Otherwise it’s just too expensive,” he explained.

“It’s also important that property buyers are aware of the risk of buying a home: that it can fall in value. And on top of that, there’s no guarantee you’ll be able to sell it when you want to.”


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