Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Twin speed housing market
While house prices in most of the country are developing moderately, they have increased by up to 20 per cent over the past year in and around Copenhagen. The development in the capital also differs from other European capitals, which have not experienced the same high increases in house prices. Periods of rapidly rising house prices have previously led to over-optimism and have been followed by significant price falls. Over-optimism, fuelled by developments in the housing market, amplifies fluctuations in borrowing and consumption, with consequences for the overall economy and individual homeowners. Although households are currently pessimistic about the economic outlook and credit growth is moderate, the currently high increases in house prices in the capital call for continued attention.
Key messages
Why is it important?
The housing market plays an important role for financial stability and the macroeconomy in Denmark. On the one hand, housing demand reflects developments in financial conditions and the economy as a whole, and on the other hand, developments in the housing market affect financial and macroeconomic activity through homeowners’ consumption and borrowing behaviour. When house prices rise sharply, there can be a risk to financial and macroeconomic stability in the longer term.
"What will be truly unfortunate is if people start buying owner-occupied flats in Copenhagen expecting them to increase by 15–20 per cent every year."
Ulrik Nødgaard, Governor of Danmarks Nationalbank, September 2025
Main chart
High house price increases in and around Copenhagen point to a twin speed housing market
Note:
The chart shows price increases from Q2 2024 to Q2 2025. Data are seasonally adjusted.
Source:
Statistics Denmark, Finance Denmark and Macrobond.