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Number of houses for sale in Denmark falls to 16-year low

The number of houses for sale in Denmark is at its lowest level for 16 years.

an estate agent's window in denmark
An estate agent's window in Copenhagen. The number of houses on the Danish market is at its lowest number for 16 years. File photo: Mathias Løvgreen/Ritzau Scanpix

The 21,141 detached and terraced houses currently on sale in the Nordic country is the lowest number since June 2006, according to Finans Danmark, and interest organisation for the financial sector.

Low supply is pushing prices up, with houses on the market at prices an average of 8.7 percent higher than they were one year ago.

High prices are not entirely preventing buyers in Denmark from completing purchases of homes, however.

“Trade activity remains impressively high,” senior economist Jeppe Juul Borre of Arbejdernes Landsbank told news wire Ritzau.

“So the low supply and still-increasing prices are not something that appear to be scaring buyers off,” he said in a written comment.

While the number of houses on sale has dipped to a low point, more apartments are now for sale compared to 12 months ago.

The 5,084 apartments on the market is around 500 more than this time last year.

The overall supply of apartments is still relatively low, however, and prices are an average of 6.6 percent higher than they were one year ago.

“On the private housing market for apartments, future buyers will be pleased that there is a slightly bigger range to choose from than there was a year ago,” Finans Danmark CEO Ane Arnth Jensen said.

“On the other hand, prices are higher now than they were a year ago,” Jensen said.

READ ALSO: Danish government refuses to intervene over soaring house prices

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PROPERTY

Will house prices in Denmark ever fall?

House prices in Denmark have increased consistently in recent years, making it harder for first time buyers to get on the property ladder. But a reversal in the trend can be expected by 2024, a bank said on Wednesday.

Will house prices in Denmark ever fall?

Increasing interest and inflation will cause house prices in Denmark to fall by the end of next year, Danish bank Handelsbanken said in a new prognosis published on Wednesday.

The bank predicts an overall fall in property prices of between 10 and 15 percent by the end of 2023, according to the analysis.

“And we would certainly not rule out such marked price drops in the most expensive areas like the apartment market in Copenhagen, which will also be impacted by a property tax reform that takes effect in 2024,” the bank’s senior economist Jes Asmussen wrote in the analysis.

High employment levels will help place the Danish economy in a strong position once it reaches more difficult times, according to the analysis.

The war in Ukraine has contributed to instability which has helped push inflation upwards to levels not seen since the early 1980s.

READ ALSO: Food and energy prices rocket as Danish inflation hits 40-year high

While the consumer price index in April was 6.7 percent higher than last year, Handelsbanken expects inflation for the year as a whole to be around 6.2 percent.

“And although it is expected to fall next year, we will probably have to get used to inflation being higher than we have been used to for many years,” Asmussen wrote.

High inflation and raised interest rates are a bad combination for home buyers who will see their buying potential diminished, the bank concludes.

But predictions of lower property prices in the future are subject to uncertainty because of the war in Ukraine and its potential to cause further inflation.

Asmussen nevertheless said it is not a question of whether house prices will fall, but when and by how much.

“We expect that the many headwinds for the housing market will lead to price drops for the country as a whole, and these will become clearer after the summer,” he said.

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