Record-low demand on Danish housing market at start of 2024
The interest among buyers on Denmark’s property market was at a record low level in January.
A review of mortgage offers and purchase of homes in the first month of year, published by media Finans Danmark, shows a low amount of demand and activity on the housing market.
Some 1,874 mortgage offers were produced, the lowest number since 2017 when Finans began tracking statistics on the area.
Part of the explanation for the statistic is a lower appetite for buying a home during the winter, according to Peter Jayaswal, director of Realkredit and mortgages with Finans Danmark.
“Additionally, interest rates on mortgages and house prices are still at a higher level than the last couple of years. So it’s not surprising there aren’t as many people throwing themselves into a house search,” Jayaswal told news wire Ritzau.
READ ALSO:
- What prospective homebuyers in Denmark can expect in 2024
- EXPLAINED: Denmark’s new property tax rules from 2024
The decline in interest has been most noticeable in the Coenhagen area, where the 406 mortgages offered last month represent a 66 percent reduction compared to December 2023.
That is likely to be related to new property tax rules which took effect on January 1st, Jayaswal said.
“The new property tax system included a tax deduction if the property changed hands before the new system took effect on January 1st,” he said.
“That has probably caused a large number of buyers to expedite their investment in a new home – especially in the Copenhagen area – to get a tax deduction with the purchase,” he said.
Apartments in Copenhagen face the highest potential tax hikes under the new rules.
As such, a loss of interest among buyers is likely to be most prominent in this area of the market, Jayaswal said.
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A review of mortgage offers and purchase of homes in the first month of year, published by media Finans Danmark, shows a low amount of demand and activity on the housing market.
Some 1,874 mortgage offers were produced, the lowest number since 2017 when Finans began tracking statistics on the area.
Part of the explanation for the statistic is a lower appetite for buying a home during the winter, according to Peter Jayaswal, director of Realkredit and mortgages with Finans Danmark.
“Additionally, interest rates on mortgages and house prices are still at a higher level than the last couple of years. So it’s not surprising there aren’t as many people throwing themselves into a house search,” Jayaswal told news wire Ritzau.
READ ALSO:
- What prospective homebuyers in Denmark can expect in 2024
- EXPLAINED: Denmark’s new property tax rules from 2024
The decline in interest has been most noticeable in the Coenhagen area, where the 406 mortgages offered last month represent a 66 percent reduction compared to December 2023.
That is likely to be related to new property tax rules which took effect on January 1st, Jayaswal said.
“The new property tax system included a tax deduction if the property changed hands before the new system took effect on January 1st,” he said.
“That has probably caused a large number of buyers to expedite their investment in a new home – especially in the Copenhagen area – to get a tax deduction with the purchase,” he said.
Apartments in Copenhagen face the highest potential tax hikes under the new rules.
As such, a loss of interest among buyers is likely to be most prominent in this area of the market, Jayaswal said.
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