After a very turbulent economic period, the situation in Denmark seems to be stabilising.
Wages are rising, inflation has returned to what analysts consider normal levels, and interest rates have dropped.
READ MORE: Why Denmark's economy is looking in such good shape
With most financial analysts predicting that housing prices will increase in 2024, should first-time home buyers take advantage of the current conditions and enter the market now?
Location, location, location
Whether this is a good time to buy a house or apartment as a first-time home buyer depends a lot on location, Mira Lie Nielsen, a housing economist at Nykredit – a leading Danish financial services group - told The Local.
"If you're looking in suburbs or less populated areas of Denmark, then the situation is good. In recent years, we've had relatively low interest rates, and housing prices in those areas haven't risen as much, so buying a home there – at least historically speaking – is not expensive," Nielsen said.
However, the situation in Denmark's urban hubs is quite different.
"In Copenhagen – as is the situation in Oslo and other Scandinavian capitals – the situation is difficult. There's a limited supply of apartments, and the demand is high; many people want to buy a home there," she said, adding that in cities like Aarhus or Copenhagen, people who are in the market for a home often have more income and savings than first-time buyers.
Tips for first-time buyers
Along with focusing on areas with lower demand, Nielsen believes first-time buyers should be ready to make significant compromises to find a suitable home in 2024.
"Let's face it – it's tough for first-time buyers. They need to be able to compromise. Primarily when it comes to size and location. If they can do that, they might find it easier to get on the property ladder in Denmark this year," she said.
The housing economist's advice is backed by the figures from a recent analysis by Realkredit Danmark, which showed that the average household income required for mortgage approval has decreased in 91 out of Denmark's 98 municipalities.
However, the analysis also showed significant contrasts in income requirements between the country's most affordable and most expensive locations and that municipalities outside the urban hotspots have lower mortgage requirements.
No guarantees
While the financial industry expects housing prices to rise further this year, its forecasts are not set in stone.
"Even though we predict housing prices will rise, we don't have a crystal ball. Still, we've seen prices increase this year, and expect that to continue", she said, adding some words of caution.
"The last couple of years showed us that things don't always go as predicted," Nielsen said, noting that it's very hard to predict the Danish housing market.
"Trying to buy at the exact best time is difficult and sometimes even impossible," she warned.
READ ALSO: Is now a good time to buy a house in Denmark?
Therefore, she advised prospective buyers with strong personal finances and an immediate need to move to a new home to base the decision on their current needs, not market forecasts.
"The right time to buy a house is when you need a house and a place to live… If you try to time the market, you can end up risking sitting on your hands and waiting, even though you found your dream house and you and your family are ready to move," she said.
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