Danish property loses seven years of value
Residential property prices in Denmark are at their lowest since the third quarter of 2005, says Danske Research, part of Danske Bank.
Danske Research bases its conclusion on analysis of property statistics from sources such as the Association of Danish Mortgage Banks.
Prices on houses are down 19.5% from the peak. Apartments have lost 27% of their value, while second properties, chiefly used during summer vacation periods, have fallen by 21.3%, the bank’s economist Jens Nærvig Pedersen said.
2011 was a tough year for the sector, Pedersen added. For example, secondary properties shed 7.3% over the year, but most of this came during the second half as the fall in prices accelerated in response to uncertainty in financial markets, but also political risk linked to September’s parliamentary election campaign.
However, given that the political risk has receded and that the ECB has injected further liquidity into Europe’s financial system, the expectation is for the Danish property market to move towards stability, Pedersen said.
Price falls could still be experienced through the early part of 2012, but they are likely to be less severe than those experienced through 2011, he said.