House prices will go up starting from 2025 – new forecast

Housing economist at Nordea Kredit, Lise Nytoft Bergmann, predicts solid increases in house prices. This happens after the Economic Council has updated the forecast for the Danish economy

For now, the Danish housing market is dim. Interest rates are the highest they’ve been for many years, and prices are falling due to inflation and economic uncertainty.

The tide is about to turn, however. According to the Vismænd economic council – the Wise Men – house prices will start to rise in 2025. On average by as much as 6 percent annually.

“The Wise Men expect lower prices in 2023 and 2024. However, homeowners should not worry too much, as a large part of the price fall has already taken place,” predicts housing economist Lise Nytoft Bergmann.

“The Wise Men expect house prices to rise sharply from 2025 to 2030. If that is the case, homeowners will come out of the period with a big plus – i.e a solid increase in their free value.”

If the forecast is correct, house prices will be almost 30 percent higher in 2030 than they are today.

“The interest rate picture is not so positive for homeowners right now. Many families are affected by the high interest rates, and they have no prospect of significant interest rate drops in the near future. However, if we look a few years ahead, the picture gets brighter. There is nothing to indicate that the current high level of interest rates will continue,” continued Bergmann.

READ ALSO: Timebomb under Danish housing market, warns EU report

Strong economy
In general, the economic experts have a much brighter view of the Danish economy than in the autumn.

Employment is now expected to be as much as 110,000 people higher by the end of next year than what was expected in the autumn.

Denmark can look forward to prospect of the “perfect soft landing in the economy”, Vismænd head Carl-Johan Dalgaard said at a press conference, according to Finans.

“We are surprised by how employment continues to rise despite inflation and higher interest rates. A significant drop in energy prices and a very positive development in exports means that things have gone better than feared,” added Dalgaard.