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While interest rates are heading down, apartment prices only point one way, and that is up.
In October, the average price per square meter reached DKK 36,185 nationwide. This is approximately 0.9 percent more than the month before and the highest level ever.
This shows figures from Boligsiden, which collects data from all the country’s estate agents.
“Right now there is nothing stopping apartment prices. Neither property valuations nor changed taxes have really had any significance”, says Birgit Daetz, director of communications and housing economist at Boligsiden, in a press release.
House prices have also risen in October and are heading towards the highest level ever. In October, the average price per square meter rose 0.2 percent to DKK 17,491.
At the beginning of the new year, new rules on housing tax came into force in Denmark. The rules mean that housing in Copenhagen in particular is taxed more heavily, while the tax on housing in many other parts of the country has fallen.
With the new tax rules, many economists expected house prices to fall in places where taxes would rise.
But in Copenhagen, the average square meter price for an owner-occupied flat in October was approximately 6.8 percent higher compared to December 2023.
The most recent peak in apartment prices nationwide was in May 2022. Here, according to Boligsiden’s figures, the average square meter price hit DKK 35,925.
During 2022, inflation rose sharply, prompting central banks to raise interest rates. This sent the prices of both houses and apartments down.
Since then, inflation has been brought under control, and interest rates have started to be lowered again. At the same time, many people in Denmark are in work, and there have also been high wage increases.
It all helps to strengthen the Danes’ purchasing power and thus give a tailwind to the housing market. This is explained by Jeppe Juul Borre, chief economist at Arbejdernes Landsbank.
“We can thus state that prices have now caught up with the noticeable price drops from 2022, when inflation and interest rates soared and gave headwinds to the housing market. The headwinds have now subsided, and this means that house prices have shot up in the past year and a half”, he writes in a comment.
In the past year, the price of owner-occupied flats has increased in four out of five regions. Only in Region Central Jutland has there been a price drop of one percent.
The biggest price jump can be found in Region North Jutland, where prices have increased by 10.7 percent.
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Source: politiken.dk
