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Property sales increase in Denmark along with house prices

There has been an increase in the number of homes put up for sale in the last year in Denmark, along with an increase in prices, according to the latest property news.

An apartment for sale in Copenhagen.
There were 1,366 more owner-occupied apartments for sale in Denmark at the end of June 2022 compared to June 2021. Photo: Mathias Svold/Ritzau Scanpix

According to Finans Danmark, at the end of June this year, there were 25,239 detached (parcelhuse) and terraced houses (rækkehuse) for sale, which is 2149 more than this time last year.

There were also 6,864 owner-occupied apartments (ejerlejligheder) for sale at the end of June, which is 1,366 more than the previous year.

Despite the increase, there are still relatively few houses for sale compared with previous levels, according to Finans Danmark,

In theory, an increase in homes for sale can mean lower house prices, due to the buyer having more choice, but that is not the case this year.

According to Finans Danmark, an average house of 140 square meters costs around 2.8 million kroner, which is just over 175,000 kroner more than a year ago.

An average owner-occupied apartment of 80 square metres costs around 3.2 million kroner, which is an increase of almost 120,000 kroner from last year.

The reason the average cost for an apartment is more than a house is because many apartments in Denmark are located in Copenhagen, where property prices are much higher than other parts of the country.

Properties are also on the market for a short amount of time this year, due to a high interest from buyers.

However Deputy CEO of Finans Danmark, Ane Arnth Jensen warns prospective home sellers that the rise in interest rates, as well as the cost of living in Denmark, could make it more difficult for people to finance a home.

Inflation in Denmark, the rate at which prices rise, edged up to 8.2 percent in the last 12 months, according to Statistics Denmark. This is the largest increase over a year since February 1983, when prices rose by 8.7 percent.

“This makes it more expensive to be Danish, and this may mean that fewer people can afford to match the high property prices”, Ane Arnth Jensen said.

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PROPERTY

Denmark opposition wants tax deductions for first-time home buyers 

Denmark’s Liberal (Venstre) party, the largest opposition party, says it wants to make home ownership more affordable in Denmark. 

Denmark opposition wants tax deductions for first-time home buyers 

Under the proposal, first-time home buyers could be given tax deductions on savings set aside for buying a home, newspaper Berlingske reports.

Specifically, would-be homeowners could receive a 20 percent tax reduction on up to 50,000 kroner per year for five years, according to the Liberal plan, which the party is set to present on Monday.

As such, a couple which together saved 500,000 kroner over a five-year period would get a benefit of 100,000 kroner under the proposed tax deduction.

In addition to the tax plan, the Liberals want to spend 100 million kroner yearly building housing, with 122,000 new homes for buyers planned over the next ten years. Municipalities would be given incentives to build more homes with shorter processing times under the scheme.

The Liberals estimate that the savings scheme for first-time buyers would be used by around 50,000 people per year and therefore cost around 1 billion kroner annually.

READ MORE: Danish apartment sales cool to eight-year low  

A reform of job centres and municipal employment services, which the Liberals will also present in the near future, would help to save money which could be spent on the home ownership plan, party leader Jakob Ellemann-Jenses also said in the Berlingske interview.

The Liberals party count with the support of the Conservatives and the Danish People’s Party, although the former party is reported to favour broader tax cuts.

The Social Democratic government opposes the plan. Housing minister Christian Rabjerg Madsen told Berlingske that the proposal would push up house prices in larger cities, forcing people on normal incomes to move away from larger population centres.

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