The government specifically expects house prices to rise by 11.2 percent this year. Next year, price growth of 3.1 percent is expected.
– There has been strong progress in the housing market during the corona crisis. Home sales have risen to the highest level since the financial crisis, and there have been large house price increases, especially in and around Copenhagen, the statement says.
In it, the government presents its expectations for how the economy will develop in the future.
However, the rising prices reflect a low supply, which in several places does not keep up with demand. In all parts of the country, the supply of housing has fallen, but the fall has been particularly large in and around Copenhagen.
– During the corona crisis, there has been a very high housing demand, which is seen, among other things, by the fact that housing sales have reached the highest levels since the financial crisis.
– The development reflects that more households have prioritized the housing situation due to the need to be able to work from home under better conditions and a desire for better space conditions in light of the prospect of spending more time at home, the statement says.
Rising house prices are not just a Danish phenomenon. In many countries, homes have become significantly more expensive during the corona crisis. Sweden is one of the countries where house prices have risen even more than in Denmark.
However, the government expects that the reopening of society will mean more “normal consumption patterns”, which may dampen the demand for housing.
At the same time, the government believes in rising interest rates, which together with, among other things, the requirement for a five percent payment can put a damper on price increases.
– This is especially true in the large cities, as the measures will limit the number of home buyers, to the extent that housing price development runs from households’ incomes and assets, the statement states.
Thus, the government does not propose that there should be new interventions in the loan options.
– We follow the housing market closely, and of course we listen to all good advice. The Systemic Risk Board will soon make their recommendation. But there is nothing new today in relation to the government’s position, says Finance Minister Nicolai Wammen (S) at the presentation of the statement.
He thus refers to the fact that the Systemic Risk Council in June is expected to recommend the government to intervene. But there is no majority for that at Christiansborg.
The government emphasizes in the statement that the rising house prices have not led to significantly higher indebtedness for homeowners.
– The volume of outstanding mortgage loans to households increased by 2.8 per cent in 2020 compared to 2019. The growth was 10.2 per cent by comparison from 2006 to 2007 before the financial crisis, the report states.
Source: The Nordic Page