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Brexit boosts Danish housing market

New figures from Statistics Denmark show that home prices increased by nearly two percent in July, the latest month for which numbers are available.

Brexit boosts Danish housing market
Housing prices have steadily risen in 2016. Photo: Kasper Palsnov/Scanpix
The national average for single-family houses roses by 1.6 percent while apartment prices increased by 1.4 percent over the month before. 
 
The jump is even greater, at 2.2 and 2.3 percent respectively, when the period of May to July is compared with February to April.
 
Louise Aggerstøm Hansen, an economist at Danske Bank, said there are two key factors behind the increase. 
 
“The progress on the housing market is driven by a general improvement in the Danish economy and the incredibly low interest rates,” she wrote, according to news agency Ritzau. 
 
“The strong July figures should also be seen in the light of the significant rate drops connected to the British Brexit vote,” Hansen continued. 
 
In the days after the Brexit referendum, interest rates on Danish home loans dropped to a new all-time low, with Nordea Kredit’s ‘kort rente’ loan falling to -0.31 percent. 
 
Prices have already risen in six of the seven months of 2016 for which Statistics Denmark has figures for, and Steen Bocian, an economist with the Confederation of Danish Enterprise (Dansk Erhverv), said they are likely to continue to rise.
 
“Right now we expect that interest rates will remain low for some time still, which means that we anticipate that housing prices could well continue to rise further,” he told Ritzau. 
 
The Danish central bank warned last month however that the housing market is in danger of overheating, particularly in the capital. 
 
“Price increases in Copenhagen have been so persistent and strong that the development could be consistent with a bubble … just as in the mid-2000s,” Nationalbanken said in a quarterly report. 
 
 

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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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