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Copenhagen housing prices at pre-crisis levels

In parts of the Danish capital, property prices have reached highs unseen since before the financial crisis leading to concerns that a new bubble could burst.

Copenhagen housing prices at pre-crisis levels
Photo: Colourbox
Politiken reported Monday that an analysis of property prices in Copenhagen between 2007 and 2014 shows that prices in parts of the city have topped their pre-crisis levels. 
 
Property prices per square metre were higher in 2014 than they were in 2007 in Copenhagen’s inner city and the districts of Vesterbro, Østerbro, Islands Brygge and Valby. 
 
In Vesterbro, 2014 prices were a full 14 percent higher than at the peak of the housing bubble, with average prices going from 28,310 kroner per square metre in 2007 to 32,199 kroner per square metre last year. 
 
Islands Brygge property prices have increased by nine percent and Østerbro’s by three percent, while average per-square-metre prices in the inner city and Valby are one percent higher than they were in 2007.
 
The increases have some concerned that a new housing bubble will soon burst. 
 
“It is clear that the relatively large price increases in Copenhagen lead one’s thoughts back to 2006-2007, but there are many differences between the developments we see in the Copenhagen housing market today and what we saw back then,” Morten Skak, a professor at the University of Southern Denmark who specializes in household economy, told Politiken. 
 
Skak argued that in the late 2000s, the economy as a whole was booming and Danes were filled with economic confidence, which is far from the situation today as Denmark continues to slowly fight off the effects of the financial crisis
 
The sharp price increases are also only found in Copenhagen’s most sought-after areas. As one moves further away from the city centre, prices are still lower than they were pre-crisis. According to figures from the Association of Danish Mortgage Banks (Realkreditrådet), the average per-square-metre price in the Greater Copenhagen area is still 15 percent lower today than at the outset of 2007. 
 
Las Olsen, an economist at Danske Bank, said that it is far too early to talk about a new housing bubble. 
 
“One needs to realize that Copenhageners since 2006-2007 have seen a big increase in their real wages. With that, the property prices are actually 25-40 percent lower in relation to income,” he told Politiken. 
 

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HOUSING

Copenhagen nature area to be developed as city approves land sale

A part of the Amager Fælled nature area has lost its reserve status and can now be sold to investors, after a majority in the city's municipal council voted in favour of development on Thursday.

Copenhagen nature area to be developed as city approves land sale
Amager Fælled. File photo: Asger Ladefoged/Ritzau Scanpix

The 219,000 square-kilometre area, known as Lærkesletten, can be sold to developers who wish to build homes on the land, broadcaster TV2 reported.

The sale raises money needed by the city to pay for the new Metro lines, which opened last year, and was part of a political deal agreed in 2017.

City councillors from the Social Democrats, Social Liberals, Liberals, Conservatives, Danish People's Party and two independents voted in favour, while Red-Green Alliance, Alternative and Independent Green parties and one independent opposed.

Located on the southern edge of the natural area on island Amager, the area is frequently used by people from the city for cycling, running and walking.

“We have seen that nature and the environment are at the centre of the public’s perception of what’s important. They want real wild nature in Denmark,” Gorm Anker Gunnarsen, who represents the Red-Green Alliance on the city council, told news agency Ritzau.

An Epinion survey this week showed that 76 percent of people who live in Copenhagen are either partly or completely against development of the area.

Gunnarsen told Ritzau he still believes there is a chance of preserving the nature zone.

“We have the authority to withdraw a building permit in special circumstances,” he said.

An advisory public vote could on the matter provide the basis for this, he argued.

“This case will not then just rest on which party you are with, but also on your view of the individual case,” he said.

READ ALSO: Copenhagen natural area Amager Fælled gets new development plan

 

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