Danish apartment sales cool to eight-year low

The red-hot Danish apartment market of 2021 has cooled to pre-pandemic levels, according to new data.

Danish apartment sales cool to eight-year low
File photo of estate agent's window. Apartment sales in Denmark have cooled after the market hit record levels in 2021. Photo: Mathias Løvgreen/Ritzau Scanpix

In the first half of 2022, 8,644 owner-occupied apartments were sold in Denmark, down a third from 2021’s tally of 12,947 flats sold by that time, broadcaster TV2 reports based on  data from real estate company Boligsiden. 

The figure is also slightly down on the number of apartments sold during the first halves of 2019 and 2020. The last year which saw fewer apartments sold during its first six months was 2014.

“Many used the coronavirus pandemic to move house because they had time and opportunity and maybe felt that they were too cramped where they lived,” Mira Lie Nielsen, housing economist at Nykredit, one of Denmark’s major banks and the country’s largest mortgage lender, told news wire Ritzau.

“We didn’t have much else to spend money on so there were many first-time buyers who suddenly had savings,” she said.

“That’s what initiated the extraordinarily large buying activity which has now back to a normal year (level),” she said.

 READ ALSO: ‘Prove you’re going to stay’: The challenges of buying a home in Denmark as a foreigner

A loss of momentum in the market has been expected and signs have been apparent in recent months, she explained.

“It’s come gradually and the primary reason can be found in significant increases in interest rates during the spring,” she said.

An increase in interest rates has made it more expensive to take out a mortgage.

The trend in sales shows the market has slowed but not stalled, according to Nielsen.

“Now it is starting to be more of a buyer’s market, where sellers also have to realise that if they want to sell they have to lower the prices,” she said.

A further slowing down can be expected in 2023 and 2024, she predicted.

“There will now be a number of years with falling prices on the apartments market,” she said.

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Denmark gives cash to 400,000 households hit by energy costs

A cash payout of 6,000 kroner was sent to around 400,000 households in Dennmark on Wednesday in a measure intended to relieve people struggling with high energy costs.

Denmark gives cash to 400,000 households hit by energy costs

The one-off payouts, which were agreed by parliament in March, were sent on Wednesday to over 400,000 households which meet the criteria set to receive the relief.

“We hope that this outstretched hand of 6,000 kroner will be a helping hand in a difficult time for Danes who are finding it hardest of all due to increasing heating prices,” the minister for climate, energy and critical supplies, Dan Jørgensen, said in a statement.

All residents of Denmark are eligible to receive the payments, provided their household meets the relevant criteria – not just Danish nationals as could be inferred from Jørgensen’s statement.

“It was important for the parties behind this agreement to help in a way that could be felt and in a targeted way. We think this cash will make a difference,” he said.

Households with a collective pre-tax income of under 706,000 kroner are eligible for the one-off cash boosts, which are costing the government 2.4 billion kroner.

Additionally, the household should be primarily heated by individual gas heaters, electronic radiators or be located in a district heating area in which the heating is produced by at least 65 percent gas.

Eligible houses do not have to apply for the cheque and will receive the payment automatically to their designated account (Nemkonto). In households with more than one person, the oldest member of the household receives the payment.

Errors in registration data can result in households which meet the criteria not receiving payments automatically, according to the Danish Energy Agency. People who believe that their household meets the criteria, but have not received the money, will be able to apply for it to be sent to them at a later date. Application will be possible from January 2023. 

Jørgensen said on Wednesday that the government did not expect any further cash payouts to be made to homes heated by gas. Instead, the government’s focus is to move away from dependence on gas as an energy source.

“Before the summer holidays we made a plan that ensures we phase out gas as a heating source, he said.

READ ALSO: Denmark announces major plan to replace gas heating in homes