Property prices in Copenhagen and Aarhus will fall, bank predicts

Have property prices peaked? It certainly could appear that way if economist predictions are correct

Stephen Gadd

Mar 2, 2018

Rising interest rates, a tightening up of the laws regarding credit, and falling prices in Oslo and Stockhom are among the factors contributing to falling apartment prices in Denmark’s two largest cities in the first quarter of 2018.

Figures collected by Sydbank for Finans reveal that the property market is suffering its biggest setback since 2014 and that these lower prices might become a lasting feature, reports TV2 Nyheder.

“We are seeing a cocktail of factors that are together responsible for the biggest fall in prices that we’ve seen over the last four to five years,” said Søren Kristensen, a macro economist at Sydbank.

According to Sydbank’s model, property prices will fall by 1 percent over the first quarter and this will keep the annual increase down at 6.4 percent. That is rather lower than the 9 percent average gain since the start of 2014.

Over the next year, the increase will be nearer 4 or 5 percent and that will primarily affect the prices of flats.

Interest rates have been increasing since the start of December and this has hit those property owners who are most in debt hard, according to Nordea. These are often found in the bigger towns.

“The tendency that we’ve seen regarding flats with price rises in the double figures over the last year is shifting. That time is over,” said Lise Nytoft Bergman, the chief analyst at Nordea.

In January, 12 percent fewer owner flats were sold in Copenhagen than during the same period last year. That is the first time figures have gone down since 2011.

House prices that have not risen anywhere near as much as prices for flats are only predicted to rise by 1 percent in the first quarter, ending the year with a 3.5 percent rise.

“Property prices have risen so much that a lot of people just can’t afford them. When interest rates rise and it is more difficult to get credit, it has an impact,” explained Nykredit chief economist Tore Stramer.

“We are now entering a period when price rises are going to be far more moderate and more in step with wage rates,” added Stramer.

TOP STORIES

“Talents, start using AI tools now,” says Siri and Change.org founder

In an exclusive interview with The Copenhagen Post, the founder of Siri and Change.org, and currently VP of AI Experience at Airbnb, gives young talents advice on how to deal with the job market changed by artificial intelligence.
Testing free school meals for 20,000 kids and tax deduction for homeowners in 2025 Finance Act

The government has reached an agreement on next year’s Finance Act with SF and Radikale Venstre. A test on free school meals for a limited number of children will be introduced. Homeowners will get more options for deductions for home improvements
Make your voice heard as an expat

In my last op-ed, I made the case that we, expats living in Denmark, need to step up if we want to tackle the headaches that seem baked into expat life—e.g., counterintuitive laws and endless paperwork. With almost 16% of Denmark’s population made up of internationals, we actually have the numbers to influence real change. But after publishing the last op-ed, several readers contacted me and asked: Okay, but what can we actually do?
Danish politicians will double life science exports in a few years

“Strategy for life science” is a policy agreement to support the pharmaceutical industry’s opportunities to double exports to DKK 350 billion towards 2030
Royal House unveils new portraits of King Frederik and Queen Mary

Ten months after Frederik went from crown prince to king, new civil portraits of the new royal couple have been taken.
“Without internationals, we wouldn’t have the people we need,” says Fujifilm

Fujifilm’s Hillerød facility thrives with a diverse workforce, employing over 1,800 people from more than 65 nationalities. Morten Munk, Director of Global Alliance Management, highlights how the company’s rapid growth relies on attracting international talent due to Denmark’s limited pool of scientific professionals.

Connect club

Connect Club is your gateway to a vibrant programme of events and an international community in Denmark.

5 Dec: A guided tour of Christiansborg

Career

“Talents, start using AI tools now,” says Siri and Change.org founder

In an exclusive interview with The Copenhagen Post, the founder of Siri and Change.org, and currently VP of AI Experience at Airbnb, gives young talents advice on how to deal with the job market changed by artificial intelligence.
“Without internationals, we wouldn’t have the people we need,” says Fujifilm

Fujifilm’s Hillerød facility thrives with a diverse workforce, employing over 1,800 people from more than 65 nationalities. Morten Munk, Director of Global Alliance Management, highlights how the company’s rapid growth relies on attracting international talent due to Denmark’s limited pool of scientific professionals.
“Now the biggest challenge is to retain internationals”, says Ferring

Mads Hougaard, senior HR director at the pharmaceutical company, explains that “it is also a challenge for society itself. I think collaboration between institutions, companies, and stakeholders could be beneficial.”

Want to advertise your job with CPH Post?

Jobs