A multi-speed housing market

Authors Dam, Niels Arne; Hvolbøl, Tina Saaby; Rasmussen, Morten Hedegaard
Subject Danish Economy; Models; Other economic analyses; Housing Market, Home Financing
Type Monetary Review  
Year 2014
Published 9 October 2014
Link to publication Monetary Review, 3rd Quarter 2014
At the national level, Danish house prices are increasing,but the housing market as a whole is still struggling with low turnover, a substantial housing supply and a long time on the market. However, there are considerable regional differences. Large Danish towns and cities, especially Copenhagen, are experiencing a surge in house prices, reasonable turnover and limited supply. In recent years, population numbers in large Danish towns and cities have been growing faster than the housing supply, indicating pressure on the housing market. At the same time, prices in most of Denmark are unchanged or slightly higher, implying that the market is sluggish with slow trading activity and many homes on the market. In some areas, house prices are falling, and sales are few and far between. These areas also have an overrepresentation of enforced sales. Moreover, population numbers are declining, and there are no immediate indications that this will change. If the balance between supply and demand is to be restored, permanent changes in the housing supply are required. This will take many years to accomplish.